Department of HeaIth and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

THE MEDICARE PEER REVIEW 

ORGANIZATIONS’ ROLE 

IN IDENTIFYING AND RESPONDING 

TO POOR PERFORMERS 

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— 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amended, is to protect the integrity of the Department of Health and Human Services’ (HHS) 

programs as well as the health and welfare of beneficiaries served by those programs. This 

statuto~ mission is carried out through a nationwide network of audits, investigations, and 

inspectionsconducted by three OIG operating components: the Office of Audit Services, the 

Office of Investigations, and the Office of Evaluation and Inspections. The OIG also informs the 

Secretary of HHS of program and managementproblems and recommendscourses to correct them. 

OFFICE OF AUDIT SERVICES 

The OIG’SOffice of Audit Services(OAS)provides all auditing services for HHS, either by 

conducting audits with its own audit resources or by overseeing audit work done by others. Audits 

examine the performance of HHS programs and/or its grantees and contractors in carrying out 

their respective responsibilitiesand are intendedto provide independentassessmentsof HHS 

programs and operations in order to reduce waste, abuse, and mismanagementand to promote 

economy and efficiency throughout the Department. 

OFFICE OF INVESTIGATIONS 

The OIG’SOffice of Investigations(01) conducts criminal, civil, and administrative investigations 

of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 

by providers. The investigativeefforts of 01 lead to criminal convictions, administrative 

sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud control units which 

investigate and prosecute fraud and patient abuse in the Medicaid program. 

OFFICE OF EVALUATION AND INSPECTIONS 

The OIG’SOffice of Evaluation and Inspections(OEI) conductsshort-term management and 

program evaluations(called inspections)that focus on issues of concern to the Department, the 

Congress, and the public. The findings and recommendationscontained in these inspection reports 

generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, and 

effectivenessof departmental programs. This report was prepared in the Boston regional ofilce 

under the direction of Mark R. Yessian, Ph.D., Regional Inspector General, and Martha B. Kvaal, 

Deputy Regional Inspector General. Project staff included: 

BOSTON HEADQUARTERS 

Joyce M. Greenleaf, Project Leader Barbara Tedesco, Technical Support StaJf 

Elizabeth A. Robboy 
Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

THE MEDICARE PEER REVIEW


ORGANIZATIONS’ ROLE 

IN IDENTIFYING AND RESPONDING 

TO POOR PERFORMERS


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EXECUTIVE SUMMARY


PURPOSE 

To assess the ability of the Medicare Peer Review Organizations to identify and respond 

to poorly performing physicians and hospitals at a time when their primary mission is to 

improve the overall quality of medical care. 

BACKGROUND 

In carrying out their mission to protect Medicare beneficiaries, the Peer Review


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


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


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


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


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


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


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


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


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


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


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


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


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


FINDINGS 

As the PRO Program becomes increasingly committed to improving the overall practice 

of medicine, its ability to find and take action on poorly peiforrning physicians and 

hospitals is questionable. 

F	 Limited Leads. The PROS find themselves with very limited leads to identify 

poorly performing physicians or hospitals. The PROS rely on beneficiary 

complaints, referrals from the medical community, and newer approaches to 

identify poor performers. However, the beneficiary complaint process, as we 

indicated in a recent report, has signiilcant flaws; the referrals from the medical 

community remain minimal; and the new approaches have identified few leads. 

E	 Limited Analysis. Once the PROS become aware of an instance of questionable 

care, they are unlikely under their current contracts to determine if it is an isolated 

event or part of a pattern of such care. The PROS do have the authority to collect 

and analyze such data. Their priorities, however, are elsewhere. 

i 
F	 Limited Follow-Up. During their current contracts with HCFA, 10 of the 22 

PROS in our sample had not initiated any improvement plans that compel 

individual physicians or hospitals to address the quality-of-care problems. The 

other 12 initiated improvement plans in response to 146 quality-of-care problems. -. 

One PRO identified half of those problems: 

k	 Moribund Sanction Recommendations. The PROS’ sanction recommendations to 

the Office of Inspector General have dwindled from a high of 72 in FY 1987 to 

12, 14, 13 and 13 in FYs 1991 through 1994. 

F	 Minimal Referrals to State Medical Boards. In 1993, Congress passed 

legislation requiring PROS to share information with medical boards on physicians 

found to be responsible for serious quality-of-care problems. The legislation 

appears to have had little, if any, impact on the level of such sharing. 

The PROS themselves find much that is positive about the current direction of the 

Program. But some express reservations about its impact on protecting Medicare 

beneficiaries from poor performers. 

�	 Compatible Functions. Seventeen of the 22 PROS (77 percent) in our sample 

indicated that the two basic PRO functions--improving the mainstream of care and 

dealing with poor performers--are compatible. 

b	 Weakened Protections. Yet, when questioned further, 11 of 22 PROS 

(50 percent) concluded that beneficiary protections have become weaker. This 

compares to 5 (23 percent) that concluded protections have become stronger, 

4 (18 percent) that concluded protections have remained about the same, and 

2 (9 percent) that did not know. 

RECOMMENDATION 

Our inquiry does not question the PRO Program’s focus on improving the mainstream of 

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

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

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

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

Program’s current direction holds promise for improving the overall practice of medicine. 

This is of great importance to Medicare beneficiaries and others. 

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

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

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

vulnerability. 

We recommend that HCFA reconsider the PROS’ function to identi! and respond 

effectively to poorly pe~orming physicians and hospitals. 

ii 
There needs to be a public discussion on what existing or potential processes could deal 

effectively with poor performers. To further that public discussion, we offer two options 

for HCFA to consider based on the premise that the PROS’ emphasis on improving care 

overall will remain dominant: 

OPTION 1 

� The HCFA should proceed toward directing the PROS to focus exclusively on 

improving the mainstream of care. To help deal with poor performers, it should 

consider ways in which the Federal government might support other bodies, such as 

State medical boards and ombudsmen, that are more focused on addressing individual 

cases of poor medical care. 

Pros.o Could clarify the PROS’ mission and thereby contribute to improved 

performance. Could make PROS’ mission consistent with their funded and 

operational priorities. Could contribute to more effective performance by other 

bodies focussing on poor performers. 

Cons: Could undermine improvement efforts by removing what some regard as a 

complementary function of the PROS, Could weaken the PROS’ authority with the 

medical community. Could endanger beneficiaries if others fail to deal effectively 

with poor performers. 

OPTION 2 

� The HCFA should devote further inquiry to determine: (1) if the two functions 

of improving the mainstream of care and identifying and dealing effectively with poor 

performers can reasonably be perfo~ed by one organization, and (2) how PROS can 

carry out both simultaneously. Toward this end, it could suppoti research efforts, 

demonstration projects by individual PROS, and conferences. 

Pros: Could lead to a better understanding of the two fimctions’ compatibility. 

Could identify benchmark practices among the PROS. Could lead to innovation in 

how PROS achieve both functions. 

Cons: Could delay inevitable decisions about the direction and role of the PRO 

Program. Could call for additional resources or siphon resources away from 

improvement projects. Could restrict PROS from effectively performing either 

function. 

COMMENTS ON THE DRAFT REPORT 

We solicited and received comments on the draft report from the Health Care Financing 

Administration (HCFA), the American Medical Peer Review Association (AMPRA), the 

American Medical Association (AMA), the American Association of Retired Persons 

(AARP), the Public Citizen Health Research Group (hereafter referred to as Public 

,.. 

111 
Citizen), and the Coalition for Consumer Protection and Quality in Health Care Reform 

(hereafter referred to as the Coalition). We include the complete text of the detailed 

comments in appendix E. Below we summarize the major comments of the respondents 

and then, in italics, offer our responses. In the report, we made minor edits in response 

to comments. 

The HCFA concurred with our recommendation, found merit in both options, and asked 

us to call for a public discussion on the issues. It also expressed concerns about our 

discussion of the PROS’ limited efforts in identifying patterns of poor care and our 

presentation of the survey data on weakened protections. The AMPRA supported option 

2, believing it is premature to focus PRO activity exclusively on improving the 

mainstream. The AMPRA believes the two functions are compatible and that the quality 

improvement approach holds promise for dealing with poor performers, giving several 

examples of successful projects. The AMA indicated that it had no firm position on either 

option and noted that the primary focus of the PRO program should be improving the 

mainstream of care. The AARP disagreed with option 1 because of its strong belief that 

PROS retain their responsibility to identify and respond to poor performers. Public 

Citizen also disagreed with option 1, noting that while continuous quality improvement is 

a welcome addition to beneficiary protections, it cannot replace detecting poor performers. 

Public Citizen supported further study as outlined under option 2, The Coalition, while 

reserving final judgment on the options, indicated it has concerns about the PROS’ ability 

to provide adequate beneficiary protections given the dominance of their function to 

improve the overall practice of medicine. 

We appreciate HCFA’s suppoti for our recommendation and have added language calling 

for a public discussion. With respect to HCFA’s concern about our discussion of limited 

e~orts, we have edited our text to re~ect that PROS have the authority to collect and 

analyze data. With respect to its concern about our presentation of the survey data on 

weakened protections, we have attempted to provide appropriate context for inte~reting 

the survey data. We agree with AMPRA that continuous quali~ improvement holds 

promise for the overall practice of medicine. Our concern, however, is that with the 

PROS’ focus on such systems-oriented approaches Medicare beneficiaries remain 

vulnerable to harm from individual poor performers. We appreciate all the comments on 

our drafi report and urge continued discussion on the roles PROS can play in protecting 

Medicare bene$ciaries from poorly pe~orming physicians and hospitals. 

iv 
PAGE 

EXECUTIVE SUMMARY


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


FINDINGS


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


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


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


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


APPENDICES


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


B: PROs’Sources for Identifying Quali~-of-Care Problems . . . . . . . . . . . . . . . .B-l


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


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


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


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

INTRODUCTION


PURPOSE 

To assess the ability of the Medicare Peer Review Organizations to identify and respond 

to poorly performing physicians and hospitals at a time when their primary mission is to 

improve the overall quality of medical care. 

BACKGROUND 

In April 1993, the Medicare Peer Review Organizations (PROS) began implementing their 

fourth contracts with the Health Care Financing Administration (HCFA). These contracts 

marked major changes in the PROS’ aims and operations. The PROS now aim to improve 

the overall practice of medicine. They do this by working collegially with the medical 

community in analyzing patterns of care and outcomes and by sharing their insights with 

that community. Their focus is now on the performance of systems of care rather than on 

individual caregivers. 

The HCFA refers to this initiative as the Health Care Quality Improvement Program 

(HCQIP). The HCQIP rests heavily on the precepts of continuous quality improvement, 

which hold that it is far more important to improve the overall performance levels even 

slightly than it is to identify and address poor performers at the margin. This emphasis 

reflects the kind of redirection called for by the Institute of Medicine in its comprehensive 

assessment of Medicare quality assurance efforts. 1 

Prior to the fourth contracts, the PROS sought to ensure the necessity, quality, and 

appropriateness of care rendered to Medicare beneficiaries by identifying and addressing 

individual clinical problems. They did this by reviewing individual instances of 

questionable care that they had identified through random medical record reviews or 

beneficiary complaints. At times, the PROS’ reviews represented as much as 15 percent 

of Medicare hospital discharges. Once they confirmed a quality-of-care problem, they 

addressed it by taking follow-up actions they deemed appropriate. At the extreme, such 

actions could involve recommending a sanction to the Office of Inspector General (OIG). 

Thus, with the start of the fourth contract, the PROS began to perform two basic 

functions. The dominant function, however, is the function aimed at improving the 

overall practice of medicine. During the past 2 years, the HCFA has increasingly stressed 

it. At the same time, HCFA continues to rely on the PROS to safeguard Medicare 

beneficiaries by identifying and dealing effectively with individual poor performers. This 

function has always faced major constraints, many of which have been highlighted in prior 

reports by the Office of Inspector General .2 In fact, in our prior report, The Beneficiary 

Complaint Process of Medicare Peer Review Organizations, we assess the beneficiary 

complaint process--a- key safety valve for beneficiaries. In that report, we found that 

while the complaint process represented an important source of information on poor 

1


— — 
performers, it has some flaws that undermine its effectiveness. We offered 

recommendations to HCFA for improving the process as a near-term solution. 

In this report, we use the term poor performers to refer to physicians whose medical 

knowledge and/or practice skills are below minimally acceptable standards (as determined 

by the medical community) and who, therefore, pose a continuing threat to the safety of 

their patients. With respect to hospitals, we refer to those institutions having insufficient 

internal systems to ensure that patients are receiving minimally acceptable standards of 

care. 

In this report, we look more broadly at the effectiveness of the PROS in addressing 

individual poor performers at a time when their focus stresses dealing with system 

improvements. We conclude with a recommendation that supports long-term strategies for 

dealing with poorly performing physicians and hospitals that fail to meet minimally 

acceptable standards of care. 

METHODOLOGY 

We relied on 4 sources of information: (1) surveys of 22 PROS representing 72 percent


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


PROS’ medical record reviews completed under the fourth contract and through


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


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


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


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


contract with HCFA.


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


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


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


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


had occurred.


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


by the President’s Council on Integrity and Efficiency.


2

FINDINGS


As the PRO Program becomes increasingly committed to improving the overall practice 

of medicine, its ability to find and take action on poorly performing physicians and 

hospitals is questionable. 

� Limited Leads. The PROS find themselves with very limited leads to identify 

poorly performing physicians or hospitals. With the phasing out of the random 

sample medical record review, which has been the primary source for identifying 

poor performers, PROS still have other sources for identifying poor performers. 

These include beneficiary complaints, referrals from the medical community, and 

newer approaches developed under HCQIP. However, the beneficiary complaint 

process, as we indicated in a recent report, has significant flaws; the referrals from 

the medical community remain minimal; and the new approaches have identified 

few leads. 

The 53 PROS identified 6,010 cases with quality-of-care problems for reviews completed 

between April 1993 and June 1994.3 The majority of these (71 percent) came from the 

5 percent inpatient random sample medical record review. Yet the random sample has 

been, at best, an inefficient source for identifying leads, as less than 1 percent of all 

random sample reviews led to quality-of-care problems.4 By October 1995, that random 

sample will be completely phased out .5 In our recent survey of 22 PROS, 17 (77 percent) 

judged this reduction in record review as a major barrier to identifying individual qualityof-care problems. 

The PROS will continue to review those records mandated by law, such as those for 

quality-related beneficiary complaints. b Of the 6,010 quality-of-care problems identified 

by PROS, 9 percent came from the mandatory reviews overall and 2 percent from 

beneficiary complaints (see appendix B). In our prior report, we found that complaints 

can, in fact, be an important source for identifying quality-of-care problems. But our 

inspection also revealed that many beneficiaries were unaware of the opportunities to 

complain to PROS about the quality of their medical care and that PROS received too few 

complaints to identify meaningful patterns of poor care.7 

Further, the PROS have received few referrals from the medical community. In our 

survey of 22 PROS, 6 reported they had received referrals from their State medical 

boards; none of these referrals led to quality-of-care problems.g Eight PROS reported 

they had received referrals from hospitals and 13 from physicians; these referrals led to 

quality-of-care problems in 5 PROS.9 For those 5 PROS, though, the referrals accounted 

for less than 2 percent of all the PROS’ quality-of-care problems. At the time of our 

survey, none of the 22 PROS had written policies encouraging referrals from physicians, 

hospitals, or medical boards. 

Finally, the PROS have identified few leads through their activities begun under the Health 

Care Quality Improvement Program (HCQIP), including the cooperative projects aimed at 

3 

-. 
improving overall care. Four of the 22 PROS in our sample identified quality-of-care 

problems through such projects and their related data collection, even though these 

projects were not designed to identify poor performers. For those 4 PROS, though, the 

problems identified through cooperative projects accounted for less than 2 percent of all 

the PROS’ quality-of-care problems. The other 18 PROS identified no leads through such 

projects. 

�	 Limited Analysis. Once the PROS become aware of an instance of questionable 

care, they are unlikely under their current contracts to determine if it is an isolated 

event or part of a pattern of such care. The PROS have little medical data to draw 

upon to assess an individual physician’s or hospital’s prior performance. The 

PROS do have the authority to collect and analyze such data. However, with 

HCFA’s emphasis on cooperative projects that aim to improve the mainstream of 

care, PROS are unlikely to devote resources to tracking a questionable provider’s 

fbture performance. 

It is one thing to obtain a possible lead on a possible poor performer. It is quite another 

to conduct the analysis to determine if (1) a pattern exists that exposes Medicare 

beneficiaries to undue danger and (2) some kind of follow-up action should be taken. 

Making such a determination is a resource-intensive and often adversarial process that 

runs counter to the tenets of continuous quality improvement. It is an allowable activity 

for expenditure of PRO program finds, but is clearly not a priority under HCFA’S current 

contracts with the PROS. 

Through our survey, the PROS cited limitations in conducting the analysis necessary to 

distinguish patterns of poor performance from isolated incidents of poor care. In fact, 

officials from 16 of the 22 PROS we surveyed judged difficulties in establishing patterns 

of poor care as a major barrier to establishing improvement plans with individual 

physicians or hospitals. They must rely primarily on their historical data bases that 

include past PRO reviews. But with the reduced medical record review, these data bases 

are losing relevance. 10 And PROS reported that they rarely initiated projects under the 

HCQIP to determine whether problems were isolated or part of patterns. None of the 

22 PROS reported routinely conducting special data collection to determine if the problems 

were isolated. 

k	 Limited Follow-Up. Currently, once PROS confirm (through medical record 

review) that physicians or hospitals are responsible for quality-of-care problems, 

they rarely do anything more than inform those responsible of the nature of the 

problem. During their current contracts with HCFA, 10 of the 22 PROS in our 

sample had not initiated any improvement plans that compel individual physicians 

or hospitals to address the quality-of-care problems. The other 12 initiated 

improvement plans in response to 146 quality-of-care problems. One PRO 

identified half of those problems. 

The 22 PROS in our sample responded to all the quality-of-care problems they confirmed. 

For 99 percent of those problems, the PROS responded with a letter confirming, after 

4 
medical record review, that a quality-of-care problem occurred. 11 In only 1 percent of 

the problems did the PROS respond with more than a letter. These involved 146 problems 

and 12 of the 22 PROS in our sample. The PROS responded to these problems with 

improvement plans designed to prevent the recurrence of the problem. 12 These plans 

compelled those involved to take some action, such as attend a course (for a physician) or 

conduct inservice training (for a hospital). 

The number of quality-of-care problems the 12 PROS responded to with improvement 

plans ranged from 1 to 73, with a median of 6.5. Six PROS responded to 5 or fewer 

problems with improvement plans, 2 PROS responded to between 6 and 10 problems with 

plans, and 3 PROS responded to between 11 and 15 problems with plans. One PRO 

responded to 73 problems with improvement plans, accounting for half of the responses in 

our sample. 

Of the 146 problems the 12 PROS responded to with improvement plans, 77 involved 

plans directed to physicians and 69 to hospitals. Based on our review of 53 of these 

improvement plans, we found that most of those directed to hospitals involved a systemic 

intervention such as a review of or change in the hospital’s policies. Most of those 

directed to physicians included an educational component such as continuing medical 

education or inservice training (see appendix C). 

The extent to which physicians are subject to any corrective or disciplinary actions by 

hospital quality assurance bodies is unclear. However, given that such actions run counter 

to the collegial and self-improvement precepts of continuous quality improvement, it is 

likely to be minimal. In fact, another Office of Inspector General inspection raises 

important questions about the extent to which hospitals themselves have taken adverse 

actions directed to physicians. 13 In that inspection, we found that 75 percent of the 

hospitals in the United States reported no adverse actions to the National Practitioner Data 

Bank from September 1, 1990 to December 31, 1993.14 

F	 Moribund Sanction Recommendations. The sanction referral authority has 

continued in the moribund state we reported on in 1993. The PROS’ sanction 

recommendations to the Office of Inspector General have dwindled from a high of 

72 in FY 1987 to 12, 14, 13 and 13 in FYs 1991 through 1994. By contrast, State 

medical boards have become much more active in disciplining poorly performing 

physicians. From CY 1991 to CY 1994, annual board actions increased from 

2,804 to 3,571. 

From FY 1986 through 1994, the OIG sanctions have shown a similar decline: from a 

high of 50 in FY 1987 to a low of 6 in FY 1992, 10 in FY 1993, and 7 in FY 1994. In 

this period, 159 physicians have been sanctioned compared to 3 hospitals (see appendix 

D). 

As we reported in 1993, the drop in PRO sanction recommendations can be explained by 

three factors: (1) the statutory requirement that prevents sanction unless providers have 

demonstrated an “unwillingness or lack of ability” to comply with their Medicare 

5 
obligations; (2) the PROS’ cumulative experience with the costly, complex, and 

contentious referral process; and (3) their increasing emphasis on educational rather than 

punitive responses to poor care. Is The OIG’S high rate of rejections also helps explain 

the decline. From FY 1986 through FY 1994, the OIG rejected 41 percent of the PROS’ 

sanction recommendations based on either willingness and ability, failure to follow the 

regulatory requirements, or lack of medical evidence (see appendix D), 

Like PROS, State medical boards have a responsibility for ensuring quality of medical 

care. But, unlike PROS, State boards deal with care provided by licensees to all their 

patients, not just those covered by Medicare. The HCFA requires that, as a condition of 

participating in Medicare, physicians be licensed by their States. And as PRO sanction 

recommendations have dropped, medical board actions to discipline physicians have 

increased. Unlike OIG sanctions, which bar participation in Medicare and Medicaid but 

do not affect licensure, medical board actions can affect a physician’s license to practice. 

For example, in CY 1994, State boards took 3,571 actions of which 1,498 (42 percent) 

involved the loss of license, including revocation, suspension, surrender, or mandatory 

retirement. Another 1,256 of those actions (35 percent) involved some restriction to the 

license, such as probation or limitation. The remaining actions involved modifications to 

the licenses that resulted in some penalty or reprimand to the physicians. 16 

�	 Minimal Referrals to State Medical Boards. In 1993, Congress passed 

legislation requiring PROS to share information with medical boards on physicians 

found to be responsible for serious quality-of-care problems. The legislation 

appears to have had little, if any, impact on the level of such sharing. 

In April 1993, we reported that the PROS’ sharing of case information, even for the most 

serious cases, was minimal .17 The Citizen Advocacy Center also reported on the 

minimal level of sharing based on its 2 surveys in 1992, one that reviewed the experiences 

of 10 States where PROS and medical boards both had shown an interest in sharing and a 

second, more extensive survey of all 50 States. 18 Between its two surveys, the Center 

found that in only Ohio, Mississippi, New York, and to a lesser extent Texas, was much 

information being sent to the medical boards. 

To assess the current level of sharing, we called the medical boards in the 10 States 

identified by the Center with boards and PROS committed to sharing information. 19 We 

found that sharing remains minimal. No board official reported an increase in the level of 

sharing. Officials from 3 of those 10 States--including Ohio and Mississippi--reported that 

the level of sharing was less than what they had reported to the Center in 1992. Five 

reported the level of sharing was about the same. Two were unable to answer due to a 

lack of data. 

6

The PROS themselves find much that is positive about the current direction of the 

Program. But some express reserv@”ons about its impact on protecting Medicare 

beneficiaries from poor pe~ormers. 

�	 Compatible Functions. Seventeen of the 22 PROS (77 percent) in our sample 

indicated that the two basic PRO functions--improving the mainstream of care and 

dealing with poor performers--are compatible. 

F	 Weakened Protections; Yet, when questioned further, 11 of 22 PROS 

(50 percent) concluded that beneficiary protections have become weaker. This 

compares to 5 (23 percent) that concluded protections have become stronger, 

4 (18 percent) that concluded protections have remained about the same, and 

2 (9 percent) that did not know. 

Several PRO officials explained the functions’ compatibility by noting that improving care 

overall also improves the poor performers. They pointed out that problems they identify 

with poor performers become opportunities for cooperative projects aimed at overall 

improvement. Indeed, according to some officials with whom we spoke, it is the PROS’ 

clout as the entities that deal with poor performers that can convince reluctant hospitals to 

participate in improvement projects. Others noted that compatibility means not pursuing 

minor problems while reserving resources for those outlier physicians and hospitals that 

pose significant threat to do great harm. In fact, some said that hospital officials welcome 

the PROS and rely on them for help in identifying and dealing with poor performers. 

Yet, while the PROS reflect strong support for the compatibility of the two fi.mctions, they 

also point to weakened protections for the beneficiary. Twice as many PRO officials 

concluded protections have weakened since the third contract than concluded they have 

strengthened. Many in the PRO community with whom we spoke tied the weakened 

protections directly to their lessened ability to conduct medical record reviews. They 

reported that without funding and authority for some minimal level of record review, 

instances and patterns of poor care have gone undetected and therefore unaddressed. And 

although its value was never definitively documented, some PROS questioned if the 

sentinel effect--whereby the mere knowledge of ongoing medical record reviews creates an 

incentive to improve care with the medical community--will exist as record review 

declines. 

7

8 

RECOMMENDATION


Our inquiry does not question the PRO Program’s focus on improving the mainstream of


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


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


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


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


Program’s current direction holds promise for improving the overall practice of


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


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


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


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


vulnerability.


We recommend that HCFA reconsider the PROS’ function to identi$y and respond 

effectively to poorly pe~orming physicians and hospitals. 

There needs to be a public discussion on what existing or potential processes could deal 

effectively with poor performers. To further that public discussion, we offer two options 

for HCFA to consider based on the premise that the PROS’ emphasis on improving care 

overall will remain dominant: 

OPTION 1 

b The HCFA should proceed toward directing the PROS to focus exclusively on 

improving the mainstream of care. To help deal with poor performers, it should 

consider ways in which the Federal government might support other bodies, such as 

State medical boards and ombudsmen, that are more focused on addressing individual 

cases of poor medical care. 

Pros: Could clarify the PROS’ mission and thereby contribute to improved 

performance. Could make PROS’ mission consistent with their funded and 

operational priorities. Could contribute to more effective performance by other 

bodies focussing on poor performers. 

Cons: Could undermine improvement efforts by removing what some regard as a 

complementary fimction of the PROS. Could weaken the PROS’ authority with the 

medical community. Could endanger beneficiaries if others fail to deal effectively 

with poor performers. 

OPTION 2 

F The HCFA should devote further inquiry to determine: (1) # the two functions 

of improving the mainstream of care and identifying and dealing effectively with poor 

— 
9 

performers can reasonably be pe~ormed by one organization, and (2) how PROS can 

carry out both simultaneously. Toward this end, it could suppoti research efforts, 

demonstration projects by individual PROS, and conferences. 

Pros: Could lead to a better understanding of the two functions’ compatibility. 

Could identify benchmark practices among the PROS. Could lead to innovation in 

how PROS achieve both functions. 

Cons: Could delay inevitable decisions about the direction and role of the PRO 

Program. Could call for additional resources or siphon resources away from 

improvement projects. Could restrict PROS from effectively performing either 

functions. 

——-
COMMENTS ON THE DRAFT REPORT


We solicited and received comments on the draft report from the Health Care Financing 

Administration (HCFA), the American Medical Peer Review Association (AMPRA), the 

American Medical Association (AMA), the American Association of Retired Persons 

(AARP), the Public Citizen Health Research Group (hereafter referred to as Public 

Citizen), and the Coalition for Consumer Protection and Quality in Health Care Reform 

(hereafter referred to as the Coalition). We include the complete text of the detailed 

comments in appendix E. Below we summarize the major comments of the respondents 

and then, in italics, offer our responses. In the report, we made minor edits in response 

to comments. 

The HCFA concurred with our recommendation to reconsider the PROS’ function to 

identify and respond to poor performers. It found merit in both options and asked that we 

call for a public discussion on these issues. It expressed concerns about our discussion of 

the PROS’ limited efforts in identifying patterns of poor care, pointing out that PROS have 

the authority and opportunity to perform primary data collection if they find an instance of 

questionable care. The HCFA also expressed concerns that our presentation of the survey 

data on weakened protections would lead other readers to conclude we advocate a return 

to case review, although it understood that we did not. 

We appreciate HCFA’s suppoti for our recommendation. Based on HCFA’s suggestion, 

we added language calling for a public discussion in introducing the two options. With 

respect to HCFA’s concerns about our discussion of the PROS’ limited e~orts concerning 

problem analysis, we point out that our text specifies such analysis is an eligible program 

expense. We have edited that text to muke clear that PROS in fact have the authori~ to 

conduct such analysis. With respect to HCFA’s concerns about our presentation of the 

survey data on weakened protections, we have attempted to provide the appropriate 

context so that it is clear to readers that we do not advocate a return to case review. 

The AMPRA supported option 2, believing it is premature to focus PRO activity 

exclusively on improving the mainstream. The AMPRA believes the two functions are 

compatible and that the quality improvement approach holds promise for dealing with poor 

performers, giving several examples of successful improvement projects. The AMPRA 

also called for strengthened PRO interactions with medical boards, ombudsmen, licensing 

agencies, and accrediting bodies. 

We agree with AMPRA that continuous quality improvement holds promise for the overall 

practice of medicine, as in the systems-oriented examples AMPRA cites. Our concern, 

however, is that with the PROS’ focus on such systems-oriented approaches, Medicare 

beneficiaries remain vulnerable to harm from those individuals whose medical knowledge 

andlor practice skills are below minimally acceptable standards. 

The AMA indicated that it had no firm position on either option and noted that the 

primary focus of the PRO program should be improving the mainstream of care. The 

10 

——. .. —.. —.—.. ——____ 
AARP disagreed with option 1 because of its strong belief that PROS retain their 

responsibility to identify and respond to poor performers. Public Citizen also disagreed 

with option 1, noting that while continuous quality improvement is a welcome addition to 

beneficiary protections, it cannot replace detecting poor performers. Public Citizen also 

noted that while it supports further study as outlined under option 2, recommendations 

made in previous OIG studies should be vigorously implemented. The Coalition, while 

reserving final judgment on the options, indicated it has concerns about the PROS’ ability 

to provide adequate beneficiary protections given the dominance of their fimction to 

improve the overall practice of medicine. 

We appreciate these comments on our draft report and urge continued discussion on roles 

PROS can play in protecting Medicare beneficiaries from poorly pe~orming physicians 

and hospitals. 

11

APPENDIX A


METHODOLOGY 

Mail and Telephone Surveys of 22 PROS 

We conducted mail and telephone surveys with 22 PROS in January 1995. We chose 

these PROS through a stratified sample in which we arrayed PROS according to the 

number of Medicare beneficiaries in each State (high and low beneficiary population). 

We chose all 17 of the PROS for States in the high-population stratuml and a random 

sample of 5 PROS for States in the low-population stratum.z The PROS in our sample 

represent 72 percent of the Medicare beneficiary population in the country. The response 

rate for both the telephone interviews and the mail survey was 100 percent. 

We sent out a mail survey to all 22 PROS in which we asked PROS for specific data under 

the fourth contract. The data included sources for confirmed quality-of-care problems and 

how many such problems led to improvement plans, among others. 

We supplemented the mail survey with more in-depth telephone interviews. For the 

interviews, we designed and pretested a discussion guide with questions about identifying 

quality-of-care problems, the complaint process, barriers to identifying individual qualityof-care problems, responding to confirmed quality-of-care problems, and barriers to 

responding to confirmed quality-of-care problems, among others. 

Aggregate Data from HCFA 

We also drew on data from HCFA’S PROD3 data base (which includes the results of all 

inpatient record reviews) and PROD5 data base (which includes the results of all physician 

reviews). Through these we obtained data on the number and sources of confirmed 

physician and hospital quality-of-care problems for all PROS for reviews completed under 

the fourth contract through June 30, 1994.3 Our tests of the data revealed that 10 PROS 

reported no beneficiary complaints when, in fact, they had received such complaints. 

I These included the following States (listed in descending order of beneficiary 

population): California, New York, Florida, Pennsylvania, Texas, Ohio, Illinois, 

Michigan, New Jersey, North Carolina, Massachusetts, Missouri, Indiana, Georgia, 

Virginia, Wisconsin, and Tennessee. 

2 These included the following States (listed in descending order of beneficiary 

population): New Mexico, Utah, Montana, South Dakota, and Delaware. 

3 In analyzing our data on confirmed quality-of-care problems, we report the most 

conservative interpretations. We chose this approach to avoid double counting complaints 

that resulted in confirmed problems with both a physician and a hospital. 

A-1 
Nevertheless, when these data are viewed in the context of our telephone interviews and 

survey data, we believe the findings and recommendation in this report are valid. 

Follow-up with 10 State Medical Boards 

In April 1995, we called the 10 State medical boards identified by the Citizen Advocacy 

Center as sharing a commitment for increased sharing with the PROS in their States.4 

We reviewed their previous level of sharing (as reported to the Center) and then asked 

them to assess their current level of sharing as more, less, or about the same. 

Previous Office of Inspector General Inquiries on PROS 

We have an extensive history of reviewing the PRO Program, starting in 1988. The 

major studies we drew on in this report include: Peer Review Organizations and State 

Medical Boards: A Vital Link, OEI-C)I-92-00530, April 1993; The Sanction Referral 

Authority of Peer Review Organizations, OEI-01-92-00250, April 1993; and, The 

Beneficiary Complaint Process of the Medicare Peer Review Organizations, Draft Report, 

OEI-01-93-00250, June 1995.5 

4 The Center identified Alabama, California, Colorado, Iowa, Minnesota, Mississippi, 

Ohio, Rhode Island, West Virginia, and Wisconsin as States with medical boards and 

PROS both committed to sharing information. (Citizen Advocacy Center, information 

Exchange Between Peer Review Organizations and Medical Licensing Boards: Update 

and Report on CAC Survey, March 1992, and Information &change Between Peer Review 

Organizations and Medical Licensing Boards: Report on the 50 State Survey, November 

1992.) 

5 Other OIG reports include: The Utilization and Quality Control Peer Review 

Organization Program: Quality Review Activities, OAI-01-00570, September 1988; The 

Utilization and Quality Control Peer Review Organization Program: Sanction Activities, 

OAI-01-00571, November 1988; The Utilization and Quality Control Peer Review 

Organization Program: An Exploration of Program Electiveness, OAI-01-88-00572, 

February 1989; and, Educating Physicians Responsible for Poor Medical Care: A Review 

of the Peer Review Organizations’ EJorts, OEI-01-89-00020, February 1992. 

The Office of Inspector General has also issued a number of reports on DRG validation. 

A-2 
APPENDIX B


PROS’ SOURCESFORIDENTIFYING CONFIRMED QUALITY-•F-CAmPROBLEMS

UNDERTHEFOURTHCONTRACT FORREVIEWSCOMPLETEDTHROUGHJUNE30, 1994 

TYPE OF REVIEw 

RANDOMSAMPLE” 

MANDATORYREVIEWSh 

MedicareCodeEditOr 

HospitalAdjustment


Assistant at Cataract Surgery


Fiscal Intermediary (FI) referral


Regional Office (RO) referral


Hospital Issued Notice of Noncoverage 

Beneficiary ComPIaint 

MlSCELL~Ous REVIEWISC 

Other 

Intervening Care 

Focussed Review Selection


PRO-selected Intensified review


FI/Carrier Pre-payment Reject


Ventilator-Dependent Unit


FI Prepayment Reject


Readmission


Specialty Hospita]


UCDS


Hospital Adjustment Previously selected


TOTALS 

Total Quality 

Problems Identified 

4261 

519 

15 

37 

o 

88 

4 

274 

101 

1438 

329 

29 

11 

5 

3 

1 

3 

527 

355 

..= 

168 

7 

6218d 

AS a percentage


Of All Quality Problems


70.9% 

8.6% 

<1% 

<1% 

0% 

<1% 

<1% 

4.6% 

1.7% 

23.9% 

<1% 

<1% 

<1% 

<1% 

<1% 

<1% 

<1% 

8.8% 

5.9% 

2.8% 

<1% 

103.5% 

Notes:	 N =53 PROS. The number of beneficiary complaints represented here should be considered conservative 

because of reporting flaws. Ten PROS reported no beneficiary complaink when in fact they received 

such complaints under the fourth contract. “ Will be eliminated as of October 1995. ~ Will continue as the main source of record reviews. c Of the types of reviews listed here, only the “other” category and 

the hospital adjustment previously selected are likely to be continued. J Of these quality-of-care 

problems, 208 were selected for more than 1 reason. The PROS identified 6010 confirmed qualiV-ofcare problems through June 31, 1994. 

Source:HCFAPROD3andPROD5databases. Analysis:HHSOfficeofinspectorGeneral. 

B-1

--

--

APPENDIX C


INTERVENTIONSINCLUDEDIN IMPROVEMEm PLANS 

Directed to Directed to Total Intervention Physicians Hospitals (n=53) (n=25) (n=28) 

Protocol/Policy Change 5 (20%) 22 (79%) 27 (53%) Inservice Training 5 (20%) 17 (61%) 22 (42%) Continuing Medical Education (CME) 8 (32%) .-

Case Presentation 

Hospital Case Monitoring 

PRO Case Monitoring 

Meeting with the Hospital 

Meeting with the PRO 

Referral to Hospital


Quality Assurance Committee


Required Consultation


$PEX Exam


consideration of Sanction


I_’elephoneCall


)ther


8 (15%) 

4 (16%) 8 (29%) 12 (23%) 

4 (16%) 12 (43%) 16 (30%) 

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

5 (20%) 8 (29%) 13 (25%) 

6 (24%) 3 (11%) 9 (17%) 

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

3 (12%) 3 (6%) 

1 (4%) 1 (2%) 

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

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

3 (12%) -. 3 (6%) ote: Our analysis was based on those written materials (mostly letters) sent to us by the PROS. Thus, any telephone calls, meetings, or 

other irrtmwtdons IIOtdocumented in tfrese written materials are excluded from this table. These represent 53 of tile 146 

improvement plans that PROS in our sample initiated under the fourtfr ecmtract. 

nsrce: HHS Office of Inspector General Survey of 22 PROS, January 1995. 

.4rsal@.s: HHS Office of Inspector General. 

c-1 
TYPOLOGYOF INI’ERVENTIONS USEDIN IMPROVEMENT PLANS

II Typology I Interventions directed to I Interventions directed to II 

Physicians (n=25) Hospitals (n=28) 1! I

Educational 15 (60%) 17 (60%) 

Systemic 5 (20%) 22 (79%) 

Punitive 9 (36%) 4 (14%) 

Note Thser~r@ent 460ftie 146improvement plmtiat PROsinour smpleinitiati under tie foufimntract. Ouramdysis was basedon 

those wrhtcnrnatcrials(m ostiyle tters)se nttousbyrhePROs. Thus, arryklephoneealls, meetings, orother interviews mrtdocumented inrfrese 

written msterials are excludedfromthk table. 

The number of interventions we identified in any one improvement plan ranged from one to seven. Depending on the interventions wittdn any one 

improvement plan, it could be characterized as educational, systemic, punitive, or a combination of these. Five of the plans dbccted to physicians 

and two direettsf to hospitals contained no interventions we considered educational, systemic, or punitive. 

We considered the following interventions aa educational: ioserviw training, continuing education, and case presentations. We considered 

interventions as systemic if they involved protocol and policy changes, including the use of new forms and posting of rules. We considered 

interventions as punitive if they involved consideration of sanction, We excluded interventions such aa meetings and monitoring because we were 

unable to determine whether they were edrscatiomdor punitive in nature. 

IIsource HHS Office of Inspector General Survey of 22 PROS, January 1995, II 

Analysis: HHS Office of Inspector General. 

c-2 
APPENDIX D


OVERVIEWOF SANCTIONDATAFROMTHEOFFICEOFINSPECTORGENERAL(OIG) 

PRO SANCTION RECOMMENDATIONS TO THEOIG BY TYPEOF PROVIDER

Type of FY FY FY FY FY FY FY FY FY 

Provider: 86 87 88 89 90 91 92 93 94 TOTAL 

Physician 60 66 34 21 29 12 13 12 13 260 

Hospital 6 6 3 1 0 0 1 0 0 17 

Nursing 

Home o 0 0 0 0 0 0 1 0 1 

Total 66 72 37 22 29 12 14 13 13 278 

Source HHSOffice of Inspector General, Office of Investigations. 

OIG SANCTIONS BASEDONPRO RECOMMENDATIONS BYTYPEOFSANCTION

Type of FY FY FY FY FY FY FY FY FY 

Sanction 86 87 88 89 90 91 92 93 94 TOTAL 

Exclusion 21 34 18 10 13 10 5 7 7 125 

Monetary 

Penalty 9 16 2 0 0 0 1 0 0 28 

*PreExclusion 0 0 2 1 1 2 0 3 0 9 

Retirement 

Total 30 50 22 11 14 12 6 10 7 162 

Source HHSOffIce of Inspeetor General, Office of Investigations. 

‘Pre-exclus ion retirement results from an agreement among the PRO, the physician, and tbe OIG that the physician retire from practice rather 

than be excluded. Because the retirement would not have occurred witbout tbe saoction reeommendation, the OIG counts these as aetioos taken. 

D-1

REFERRALSREJECTEDOR CLOSEDBY THEOIG WITHOUTSANCTION 

— 

Rejection FY FY FY FY FY FY FY FY FY 

Based on: 86 87 88 89 90 91 92 93 94 TOTAL — 

Unwilling 

or Unable 

Require- 0 19 11 4 4 2 2 1 0 43 

ment 

Failure to 

Follow 

Regulatory 4 10 12 6 2 1 0 1 1 37 

Process 

Lack of 

Medical 6 5 0 2 2 5 7 1 1 29 

Evidence — -

Closed Due 

to Death or 2 0 0 0 0 0 0 0 3 5 

Other 

Total 12 34 23 12 8 8 9 3 5 114 

Source HHSOffice of Inspector General, Office of Investigations. 

D-2

APPENDIX E


Conmimrs oN mm DRAFT IWPORT 

Inthis appendix, represent in fill thecoments from the Health Care Financing 

Administration, the American Medical Peer Review Association, the American Medical 

Association, theherican Association of Retired Persons, the Public Citizen Health 

Research Group, andthe Coalition for Consumer Protection and Quality in Healti Care 

Reform. 

E-1

---

. ....!{., 

. . ~ 1. ,.. 

DEP.4RT31ENTOF HE.ALTH & HUNIAN SERVICES Health Care Financing Administratic :

:. 

-.,“Jg .’‘+‘-d, > ” 

Office of the Administrator 

Washington, D.C. 20201 

. 

DATE: OCT25 D% 

TO: June Gibbs Brown 

Inspector General . 

.& 

FROM: Bruce C. Vladecl$ 

Administrator wSUBJECT	 Office of Inspector General Drti Report: “The Medicare Peer Review 

Organizations’ (PROS) Role in Identi&ing and Responding to Poor 

Performances,” (OEI-O 1-93-00251) 

We reviewed the subject draft report which examines how well the PROS are finding 

and taking action on poorly performing physicians and hospitals. 

Our detailed comments are attached for your consideration. 

Thank you for the opportunity to review and cornrnent on this report. Please contact 

us if you would like to discuss our comments Ii.rther. 

Attachment ~ 
Health Care Financing Administration (HCFA) Comments 

on Office of Insuector General (OIG) Draft Re~ort: 

“T’he Medicare Peer Review Organizations’ (PROS) Role 

in	Identifying and Resuondin~ to Poor 

Performers,” (OEI-01-93-00251) 

OIG Recommendation 

HCFA should reconsider the PROS’ fiction to identi& and respond effectively to 

poor performing physicians and hospitals. Two options are offered. 

OPTION 1 

The HCFA should proceed toward directing the PROS to focus exclusively on 

improving the mainstream of care. To help deal with poor performers, it should 

consider ways in which the Federal Govemxnent might support other bodies, 

such as State medical boards and ombudsmen, that are more focused on 

addressing individual cases of poor medical care. 

OPTION 2 

The HCFA should devote further inquiry to determine:


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


dealing effectively with poor performers can reasonably be performed by one


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


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


PROS, and conferences.


HCFA Resuonse 

HCFA concurs and believes that both options have merit. We will work with our 

resources and the medical community to explore avenues to detelmine what processes 

are best to deal with the types of poor performers mentioned in this report. 

Technical/General Comments 

1.	 We suggest that the following language be added to introduce the hvo options 

offered in your recommendation: “There needs to be a public discussion on 

what existing or potential process there could be for dealing with the types 

of poor performers mentioned in this report. Here are hvo options. ” 
Page 2 

2.
 In regard to your discussion of Limited Analysis on page 4, we wish to point 

out that the PROS have the authority and opportunity to perform primary data 

collection if they find an instance of questionable care. We have asked PROS to 

take a scientific approach in investigating such cases through the analysis of 

clinical and operational records associated with the performance at issue. 

3.	 In regard to your discussion on Weakened Protections, we question why the 

emphasis is placed on the 50 percent of PROS that fmd protections weakened 

which apparently argues that the case review approach is better. We do not 

believe it is the OIGS intention to present an argument for case review; 

however, a reader could infer this based on the way survey results are discussed 

in this report. 

We thus suggest that the OIG clari~ their survey results to ensure that the 

reader understands that the OIG is not advocating case review. We recommend 

the following language: “Forty-one percent of the su.meyed PROS felt that 

beneficiary protections are better or equal, 9 percent felt they were neutral, and 

50 percent felt that the protections are weaker. ” .M this point tie OIG could 

explain why the case retiew method was prefemed by some PROS and why they 

felt it offered better beneficiary protection. 
--

--

Nil??ii AMERICANMEDICAL PEER REVIEWASSOCIATION 

1140 Connecticut Avwiw, NW . Suite 1050 � Washington, D.C. 20036 � 202/331-5790 � FAX: (202) 833-2047 

October 15, 1995 

June Gibbs Brown


Inspector General


Department of Health & Human Services


OffIce of Inspector General


330 Independence Avenue, S.W.


Washington, D.C. 20201


Dear Ms. Brown:


On behalf of the American Medical Peer Review Association (AMPRA) the national 

membership association representing the nation’s network of peer review organizations I 

appreciate the opportunity to review the draft Inspector General’s report, “The Medicare Peer 

Review Organization’s Role in Identl~ing and Responding to Poor Performers. ” 

AMPR4 favors option two: 

The HCFA should devote further inquiry to determine: (1) f the two functions of 

improving the mainstream of care and identlfiing and dealing e~ectively with poor 

performers can reasonably be performed by one organization, and (2) how PROS can 

carry out both simultaneously. Toward this end, it could support research eflorts, 

demonstration projects b,v individual PROS, and conference. 

It is premature to focus PRO activity exclusively on improving the mainstream of care until 

we have further evaluated the Health Care Quality Improvement Program’s (HCQIP) ability 

to deal with poor performance. In principle, we believe that the two functions are compatible. 

AMPR+ maintains that individual case review is not the only means to identify and to respond 

to poor performers. The innovative HCQIP approach of anaiysis and feedback of patterns of 

care, through the comparison of provider performance to scientifically based quality measures, 

shows promise for evaluating the full range of practice performance includirw those providers 

on the tail end of the performance distribution. While the emphasis is on improving the 

mainstream of care. PROS are also responsible for holding providers accountable for 

improvement, particularly those providers whose performance show great variance from 

accepted quality standards and are unwilling or unable to correct identified quality concerns. 

Without PRO sanction and corrective action authority, there is a real question as to whether 

all providers will be committed to making quality improvement a priority. 
The Medicare PRO k Role in Identlfiing and Responding to Poor Pe~ormers comments continued
 --

October 15, 1995


Page 2


While still early in HCQIP’s evolution, there are, nonetheless, many exampies which 

successfully identify and deal with poor performance. For example, unnecessary radical 

prostate cancer surgery for men over the age of 70 represents poor practice that has been 

corrected by PROS through feedback of information to doctors on the rates of surgety for older 

men together with the scientific evidence for non-surgical intervention. Recent guidelines by 

the American College of Cardiology and the American Heart Association state that routine 

right heart catheterization is unnecessary. As a result of PRO performance monitoring, 

feedback, and education, right heart catheterization rates have dropped significantly. 

Additionally, in Florid% Medicare beneficiaries were denied cataract surgery because of 

restrictive criteria employed by Medicare HMOS at variance from accepted Agency for Health 

Care Policy and Research (AHCPR) guidelines. PRO intervention led the HMOS to adopt the 

AHCPR guidelines, and beneficiaries now enjoy increased access to necessary care. .4MIR4 

contends that HCQIP’s more scientific and systems-oriented approach to identifying and 

responding to poor performers might prove to be a more effective strategy than the subjective 

and highly litigious system of individual case review. 

There are other reasons why AMPRA supports option two: 1) PROS are still engaged in 

individual case review through review of beneficiary complaints and hospital notices of noncoverage; 2) the absence of sanction authority would weaken the PROS’ authority with the 

medical community (as observed in the report); and, 3) removing the sanction authority from 

PROS would endanger beneficiaries if other mechanisms fail to effectively deal with poor 

performers. 

AMPRA also recommends that PRO interaction and communications with state medical boards, 

ombudsmen, licensing agencies, and accrediting bodies be strengthened. We urge HCFA to 

issue regulations that would implement the 1993 statute that requires the sharing of information 

between PROS and medical licensing boards. 

Just recently AMPR4 and Joint Commission on the Accreditation of Healthcare Organizations 

collaborated on a pilot project in the state of Pennsylvania to share PRO and joint Commission 

hospital accreditation findings for the purpose of accelerating hospital improvement activities. 

Voluntary efforts at information sharing such as this should be encouraged. 

Again, we thank you for allowing us the opportunity to comment. Please let us know how we 

can be of further assistance in resolving these important public policy issues. 

S~cerely, 

)3xecutive Vice President 
American lNledical Association 

Physlclansdedicacedto the health of Anerlca 

JamesS.Todd,.M1 515North State Street 312464-5000 

ExecutiveVicePresident ChiCagO,Illinois 60610 312464-4184 Fax 

October 13, 1995 

June Gibbs Brown


InspectorGeneral


Department of Health and Human Services


330 IndependenceAvenue, S.W. Room 5250


Washington, D.C. 20201


Dear Ms. Brown, 

The American Medical Association (AMA) appreciates the opportunity to respond to the


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


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


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


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


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


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


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


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


physicians on quality improvement efforts.


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


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


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


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


the program’s emphasis should be on improving the mainstream of care through pattern anaiysis


rather than a punitive approach that addresses individual clinical errors.


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


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


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


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


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


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


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


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


the PROS and the medical community.


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


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


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


are an integral part of the PRO process.


Sincerely,


~ d. %5@ m)a 

t ames S. Todd, MD
OJ’i*l@fintu #*”cnu/lad ku&tY&jlsoJB?’w R&&acwium 

November 21, 1995 

JuneQibbs Brow-n 

Illspomr
General


Dqmtmcmt of EIedth and HummSOfficoofthc Inapcmr Ocaeral 

330 Indoperidenee Avenue, S.W. 

WmhhgtOS D,C. 20201 

Dear IilspOctofGenwldBrowlx 

TheAmcrieanAssociationofliotimd PcrsoLIs(AARP)appnxiatca& Wp=nu@’mooxz$=m 

on the ifxpoxtantdraftnqxm “TheMsdbrc pm Rdtmu Ckgmizaticma’RoJeh ~ andRespondingto Poor I%zf&mers,” 

YOUsu~gesedudHCFAreconsider PROS’lkuedonandeilhr directthe PROSto Ibous 

-u$ivdya~mtk~~of~,~~m~=d 

how quality ~t@paibtprotection “ f¬icmscimreusonabIybeperfoxmodbyanc 

organ@don. 

We do not concur with M fm option becauseAARPbelievess?xon@ychatPROSshould 

main the msponsibilhy to idend@sad respond cffkodvelyto poor~ pcrftmntng@yatcians 

and hospitals. To do S0,@c~tierkt pmtim demears ahmddbe StIUI@WBdSOthSt they 

can be ellkcfive. In addition,t&equality _vcanant functionsPROShavs assumedshould 

be evaluatedto assesstheir impacton patientwel!-being. 

. . Jhckpmund an~ 

As AHlatest draft report ixxiicatw, #e PROpmgnun bm undergonea pmfd uadbmmth 

dwhg tk lastsevwd yems, fkomme fwwed primsriiy on ident@ing tu%iaddressing 

individual k4aneos of pvor wireto ORScmpbaaizingthe overallhuprovameQcof mm through 

cooperative+quality improvermmprojscts. The transformationwassat h motion by W 1990 

Institute of Medicine rqwrton Medieare qudiq assurance, endbaaptied ~ @ atcoq 

Suppott of thehealthpolicy andprovklercommwmies. 

Anm4cm ~0~ of~~r~ P=$u 601E SUCC% N.W., Wmbin&oIt, D,c. 2004-9 (202) 43+-2277 

EUgQIUt. bkIHIJh .?%’i&a/ Hence B, Deem &Jmdvt Dimnw 

.-.Y. \ .-. 
Inspeetor Chard BrowrA 

Novmabcr 21,1995 

Page 2 

f)lUiII$Sk dcbatoa~ ~d the tGUISfOIIX’IatiOIL ~
 ~ &WftO.@On of 

“ContimIonsQuality,Iinp.rovemcmt”
 (CQD principlesandmethoddogiea ho SheFRO-hoapiwdphpn Mcx@on. Atthe sanwdine,h~er, tie Aamei@on - CM Mdibuc 

padems’imcmatarequirednxaion of PROS’capab~ coaddmmidividual poor . perbmmmand poorpe@rm!m ti3rougltvi@rou$iute mentkx& 

OIG’s drafkreportdocummtsthefollo-. 

1.	 w*&pti~mofa{d m@mvbw, mo*tim*d~h 

- ofdermting ktancea ofpoorcaxe. Rcoonireviow ad da~colktionhad beers the 

PRO tool tkt idaniilkd 71 perccmofquaLityproblcmainrhept. 

2. Thenew climateof coopemdonwkhthephysiciawhoaphal~v~bY­

“CQI*approach,whileadmirable,appedratohavetakensomermthm of sherole of PRO 

aawatchdog. l?ilra~PROaate idcm@ingveryf- qualityproblems. SeeoT&PR@ are 

MfoMo~~onti~ @i_ bWOIG~d Z~~, oflti@@ 

problemsidentified,SOpercent wm hatulkd byOIXPRO, andPRO action on quality


problems
for the most part waa a letter of cautioxL Third, shore is no evideave tha follow 

UP ISnow beh~ handled by hoepitals, Fihdiy, it appeamjhxn OIG’SfludinggchatPRCh 

arenotsharinginformationon qwdicyof careraseawjthstarelieendngboardsaJrequhd. 

Q Esmbliahmemof a homca.1dischargeappealsya@mthat embl~ paticauKOrequesta PRO 

reviewof a deciiion to terminateMedicare covernge
 of a hospital stay.

�	 Thebeneficiaryc~mplaintauthority,whichenabltabeueiiciadeato obtain a PRO rcvkw of 

an We$ation of ii quality of care probkrn. 

� The oYerail PRO xcview authoritythat was pmnously implomenrfd through ramiom eaat! 

rcvkw aimed at txncove~ quality and uWrarbn conccrxKLbus whioh now utilizes paltern 

tiysis k the puxmit of IItainatreamquality improv~. 

In resporuiklg to the dl-llfirel)orc’srecommdatl ‘on, we believe it should bo evaluated in the 

comtext of all the padeut promxkmtllnctions ourlked above, 
InspectilrGenemlBrown 

Novomber 21,1995 

Page 3 

W&ile not the su@ct of the draft report, the PROs’statutoryresponsibilityto respond to 

Medicare beneficiaries’~ for rdew of a hospitaldiachsrgc_ cO_ 10CmbOdy 

aaiqortmtpadempnwctkmmle, Rcoomly,AARPhaspM patedinab skfore@efbrlto 

improve the Wmrxunlcation of berletiiaxios’ Ciis&qe appeal rights Ihrougb a mwrkhlg Ofthc 

“Important Message ftemMedicare”andtheuseof additionalmdxds, wch asWoos mde 

available to hosphalizod patkma and their fknilies. HCFAshould proceed with 

fmplememat$omtithe task force mmmwdmm . , andPRGashould wdeztake to aggmdwly 

informpatienbofthcir dkhergeappudxiglm. ‘lhcrahasaotbmn,aa dahouldnotbo,any 

conilictbetweenMEPROrole andPROS’newerquafityimpmvememflnmioas. 

01G6 recent companion &sit report on the benefiekry cumplaint anthorip rmmaied Wrimw 

operatlOnai doficiela5es, wbicbMRPaddW#cd iJlitecoxmm?m &t&r of~27, 1995. 

As we sUNcdin that letter.‘In,liglxof theetjminationof randomsamplerecordmviawthe 

processof Mm?-@ relqmldiqgtobmll@uy eemp- aasumeaevellgmter 

-ce~ameuti~b~~Mtim~w-~s 

TheOIGreportsmakeclearthatcomplaints~ be+ma productivemum of qualityof csre 

conocrn$.Moreover,k iachar thatneitherH@A am thePROSperceiveanh!xxmq@bil.ity 

Mrwecnthe eomplaiatautheri~ml theqpalityimprovemeaustrategy;~hint inW6@ation 

isaprominem fknureofthefifthsmpeofwork’spadentp nmctiondement% mm AARP’a 

_ve, tie complaintawhor&dcficieaxiesshouldbe remedkl, patimcsshouldk -C 

awareof its exktence, awl PROSshouldcontinueto serveas complaiutixveaiigatars. 

3. XJe PR~ v’ 

PRO-initiatedreview activitypmsmta b greatestpemcived-C betweena strategy aimed 

at identi@ii poor pcrfbmwrs, and one aimed at qwdi~ improvement. Clearly, tbe laSua@gyhas~vaik~ and,aathe01(3reportobserves: 

W& recognizetharthe nzndam nndews were Uor-inrmhg gemrmted much dkcowl 

widl ~hemedictd cornnmnity, anti idenrg?edJ%w@@@+car e problem mhtme rv the 

nundxmofrecod rew”ewed.We ati undemtundtlurr chepmrn&r qfrhe PRO 

&ogram’s ment dincrion hoiclrpnmd$efor lqrvving #u overallpmcrice of 

medicine, 7hi.ris @great impo~e to Medicare hnej?duia and others. ” 
Volm

Iaspectur Gened Brown 

Nowubcr21, 1995 

*4 

lthMbm W~on&Msee bMba CQTwiew-wtiqq 

patiti~~- ~over~~m~ti p~, dtie~~ 

individualmlaRaxl Ofpoorqueli!yWiutin boaddxcosed - cdlxationalordi sciplinary 

responsesas rcquhvd. 10thismnuecli~ animeresdngfioding&t& (XGmndyis that77 

percentof* PROSquerild(17 outVfz) boliew lhatthetwo no fimdimsareCOmpadble. 

Atthosametime, however,halfthinkbencficiarypmectimshave bomwebytie 

cwrentscope of work. 

Fm~tij~ontie sWti&ews~Wistiti Tloncwatraegy isapmmidng 

one, but remaius ~V~tdktOimSOf~l~~~Qn~~~. weOIGto~e~&witi~to timm Arc~dfi RWk~W 

IknprovexxxxProgram We alao, as duted above,-b the importanceof viewingWtOa’ 

patient protection role in a broadercomextthaxincludesrhe disobargeappeab awl bencf!eiary 

comphi.imelomenrs. Curren@, those eknems existIargclyas “paper”fimctbs, and require 

extensive pubkity and opemtimal @rovemmm coenable than to serve padonta adquarely. 

pk~S WXMili tk ItUIjOr lYStiOOd
~@Wri WtfhSU@O’dy tt)iUtWVIXW~ khdf DfMUii~


beneficiariesandfleet theirqualityof care, As moreof those bendciarb move into @w 

forms of hedlh cam delivery, with hadal Hvea that possibly tbaten healrh W 

@=W# P*- Pro-M be=me - more CWcal. 

Tho OilIce of In9pector General’s ongoing efhta la otYerremedies for aml deficienciesm the 

PRo program cmninue to prwide a great service coMcdioam &ae&bes “ .Wekmklbrtvd 

to~toworkti you~d~btim mb~ati~~q, 

Thank you again for the oppommity to cxxnmcz&If you should have any questions, phxme 

contactM-JO Gibson in AARP’s PublicPoticyJhstituteat (202)434-3896 or -I 

Matheis in Fcdezal MU’s at (X2) 434-3774, 

sincerely, 

*& 

Rdkr 

Dream


Legislation and Public Policy

.— 

October 16, 1995 

June Gibbs Brown ,


XnspCctorGeacrei


Depamnent of Healthsnd HumanSewic&z


Washington,D.C. 20201


Dear Ms. Broww 

Please find enclosed our comments on the OIG’S draft repo@ “The Medicare 

PeerReview or@lJbti021S’ Role in Idmt@ing md kpmdiq to Poor Performers.” 

We appreciate the opportunityto review and commenton (his report. Pleam let us 

kuow if we can be of furtherassistanceto you or your staiT in your studies regarding 

P= Review Orgsnimtions. 

SkJJiC 

s w fe, M.D. Laureu Dam

Director 

Si&ey u Staff Attorney 

Emiosure 

fblph Nadrr, Frnadu 
co~ ON “~ MEDICARE p= RE~ ORGA~~ONs*” 

ROLE 11+1IDENTIFWNG AND RESPONDING TO POOR PERFORMERS” 

(OELOM2-002SI) 

Submntcd by Public Citi&n’s HeahhResearchOsoup 

October16, 1995 

Wc qpwiate this oppwtmhytounnment nnthisreport bythe OfTweof I~ 

General~OIG”) ofthc Dep@nwntof HealthandHuman Semoes (WHS”). Public Citizen’s 

Health ResearchGrouphas k a ~ oftheeoaceptof P= Reviav organizations 

(“PROS”) since their inceptiom end believca that PROS, ifsmq@ex@ could Serve 9 M roje 

in protecting Medicarebeneficimies* P- CPM@ndicai -. A the repofipints ou& 

the main emphasisof PROShas shiftedin the past fw years from ttying to identifi end 

resporxl to imiividtlal phyalc188Sand hospitals that are performing poorly, to incorporating the 

concepts of “continuous quality irnprovcmcrd’! md umrlcing with the medical conmxmity to 

improve the overall quaiity of medicine. 

We agree with the report thaG given this shifl in focus, it is hn-t co assess the 

abilky of the PRC)Sw continue to perform tiir “policing” role. We disagree, hovwwer, with 

the policy options suggested by the rupor% partict+arly Option One – to eliminate tha PROS’ 

role in identi~ and responding to individual poor pcrfimnus, and to focus only on 

improvesmmt in the overall practice of medicine. We “contitmow quality improvement” is 

a vvclcome addition to the methods of protecting Medicare I-ef3ciarie$ it dots not and 

cannot, replace the necCsWy task oftkcting poorperforrnent.fmpruv@ theoverallpmctice 

of mdiciac may ineidesulyidenm some poorperfbrmen,butsuch is notits prinmy goal. 

andin orderto fully pmtcctMedicare beneikhries. the govemmnt mustcontinueto seek out 

those docto= and hospitals* cawc needlesssufkiog becauseof I—C= ssary or poor 

quality medical cam At_ thereis no organizationor ageacy b adequatelyprotects 

Medicarebenticiasics orthebroaderpatientpopulationtlom@y porfonningphysiciansand 

hospitals. Whatprotectiondoes exist comes from a vasicty of groupqsuchas statemedical 

boards,hospitalqualityamuranwdep~ ~on org=imtio~. md o*m Whi* 

at best offer only a patchworkof protection. Emh grouphas a difRmmmissionandfocus, 

andeach protcas the mstdicalconsumerto oxdya iimitcd degree. 

� State medkal boards, the fii line of defense against poorly perftmnmg physiciq 

have a mixed record in protecting the public. Each yesr, PubIic Citizen’s Health Ikearch 

Group compares the perfonnanoe of the various state medical boards by analyzing the rate at 

which doctors are disciplined in each state. We have found an enormous variation among the 

difkrcnt state licensing boards: in 1994. for �xampk the Kentucky Medical Board had a rate 

of 9.62 seriow disciplinary actions pcr 1000 doctors. while the Pennsylvania Medical Board 

had a rate of only 2.04 suiom alinxy actions p= 1000 cioctms ~s, while some state 

boards may offer masnnabk protection to citizens in that slam. other boards discipline sv &W 

physicians that they offer tiost no w~tion m ~ 

� Hrmpitd qua~ ssmrmee departrncnts, another possib~e line of defense against 

poor performance, conduct dtcir bwincss behind a shroud of sscrecy, making it bard to assess 
--

--

the S~ of their cffO~- & Of hcambcz 1993, howcvm, Sevcmy-five pemcnt of the 

hospitals in this country had not reported to the National Praotiti- Data Bank even ona 

adverse action taken against a doctor. Given the wry limited number of reports fihxl by 

hospitals _~byi=W- there is reason to quastion whether hospitals are 

acsivalyiddifjhg and responding to poor performingktor~ and to be wnccrnerl about the 

level of protection provided to patirmts. 

� Aecmdtiag orgdzatioma that inspecthospitals the most impmtant being the 

hint Gxnmission on the Accreditation of HealthutreOrgmizmiona(“NXHO~ -- offbr little 

to instill coufMenm in the public. LI%Ohospital quality assurance -~u, the KWfo 

maintim the results of its inspectionsin secrecy,andrarely* *cRditatioII to a hospital. 

Public Citizen’s Health Rtaeamh GrotqJhas long &en critical of the faot that the JCAHO, a 

private organizdon dosnbtcd by the indusrty it is supposed to be regulating, has been given 

so large a role in “pmtcoting” Medicare beneficiaries from poorly performing hospitals. 

Option Onc in this rcporr includes ,& mggcdon that the Hcaltb Care F_ing 

Administnititm consider ways for the fkxfcraigovernrncmto suppm the efforts of organizations 

that - tnmc fd on addxcs&g individual caxs of poor cam - this is an idsa rhat we 

suppoc but notat the cost of PROS’ “pokingrole.”Em wirhthecxxsmxe of PROS, the 

~m fm kkntifjhg and respdbg to poorly performing physicianssnd hospitais is hardly 

a scamieas web. WithoutPROS,?hcmwill be �ven less prorcction for Mdkarc bcncficiarics. 

option TWO~ -g the PROSm dctcsmine & &Y can perform both 

roles atthcsarno~tif m,howbcstodom. Whdewcsupport fiJrther study to 

determine ways to improve PRO$ WCJ
 would like to point ow hat most of theprobicms

idcatificd in this report Imvc been identified bcfm intheseries
of OIG reportscited in 

Footnote 2. WC thePROS’ shift in fbcus may have exacerbated Wme of their probicntsin 

ided@ing and maponding to poor pcdorrncrs, the nattm of tbe probkms has not cbnged. 

TOboom the perfomuuwc of pRO& therefore. w suggest that SOMCof the recommendations 

of ptwious reports be vigorously irnplcmcnte4 ia palticuk 

‘ HHS shouldpropose legislation requiring PROS to provide case infimnation 

to State mdical boards when PROS have con6rmcd that a ptIysicim is 

responsible for poor ctuality of cam rcsuking in harm to the pet.sent. T%e 

legia&tion pmposcd should resoivc the umfbsion causedby OBRA ’90. (PL 

101-508), which rqukcs “notice ad hhg” ~0= PROS sh~ ~ 

information. 

� KHS should seek legislative change that would pcnnit PROS to provide and 

~ive data from the National Practitioner Dara Bank. (he of the problems 

idcntifld in the report is the diflicuky of a PRO determining whether poor 

behavior is part of a pamn or merdy an isolarcd incident and tuxss to other 

information coilmtd in the National PractitionerDatn Bankwould assist in such 

a&termu@ “on. 

2 
“ m slmuld sdc ~C@ltiW - to imeasc the amount of JZIOM&U’y 

pemddespexmitted in order to make them a more meanhgM sanctiom Current 

lmv limits monetaty penalties to the amount of the medicdly mmcusuy or 

impmper wrvicc -an amount toosmall tosweasa,nadaquate sanotionor 

� W sbotdd * legislationto repealthe mquircment thatphysiciansor 

h+ds Which hWC ViO&d Mldkdrc obli@ions IItllyb S=CtiOllCd only if 

they demonstrate au “unwillingness or inability” to comply with Medicare 

obligations. 010 reportssince u iesst 1988 have &mti&xl this “unwilling or 

unable” requirement s a major impedimem ro PROS ex=isiug thcii sanction 

referral authority, and havw WcOmmendeddcktion Of this n@re?neIIL 

� HHS should inczeasccducatiomdand outreachcfibrts to inform Mcdicarc 

beneficiaries of the existence and fucdons of PfUls. Bencticisry wmplaints 

will become an even mom importantIsourccof leads f= PROSas the mndom 

sample medical record review is phased OUL 

PROS can save a vital role in pmtmdng Mcdicam beneficiaries fm poor quaiity 

~dc~b~hwnotym~ti~loti~t~ OVWti P=tycam PROs’ use 

of their simction authority h- dtidIuL and now with* shift in fww to “contimmus quality .

~“ and eduoiatioxu we & that PROS till become ICSS effeotive unieas the 

rcwmmendations made in previous 01(3 repo@ attdrepeatedhere in ous commmts. are 

ilnplcmenuxi. 

We arc not unmindfuiof tho difficultiesPROSmay have as their msoumes areshiftcd 

more and more towards doming their mandate to improve rhe general practice of medicine. 

This focus, however, cannot replace the ncccsary task of i&ntify@ individual pooK 

performers - both physiciansandhospitals- in the medicaificid- T&ctwo approachesdeal 

with difIkrentaspects of qwdiryproblcu and no matterhow much “continuous quality 

~t” is abk to raise geneml staurkds of medical c- there will always be pour 

performers who iqjum individualpatientsandwho mustbe detectedand sanctioned. PRO% 

in order to filly protect Mcdicam t=neficitiex must be strcngthend to perform this set+-. 

3 
--

— 

Coalition for Consumer Protection and Quality in HeaithCare Reform 

1275 K Street, N.W., Suite 900 Washington,DC 20005 

(202)789-3606 Fax (202)842- 1 I 50 

Ma.JuneGibbsErown 

InapecsorGeneral ~ ofHealthandHumanSenficea 

Cohen Wilding, Room5250 

330hv@endeIIwAve.,S.W. 

Washin~ D.C.?lMll 

Dear
Ma.Brown: 

M YOUfor asking LheCoalitim 

November6, 1995 

for Comer Prote~on and Qua@ m Health Care Reform 

to~em m yourdaft r~, “W h-f~mc peerReview orxtim” Role in Identifyingand 

-am-per farmers.” 

~e thlitionis composed of mom @ @ OrgSSI&ItiOIIS witi thc c-on goal of a health 

care system that offers good consmner information, meaningful choice, quality assurance, and public 

acumntabiiity. When we receive a tequest for commem such as yours, we cirmdare the document to our 

ItMMbershipasking for their comments. Depending 0SSthe issue, we may receive one or more 

comments. Forexample,iny~ previ~ report,deaI@wifi Wmpltit haIKU@, four of our member 

organizxions -d. We ~ways ~ OKIthe -M ~eMS of w meo&N, as we did with the 

above-mentioned report. 

Onsome issues, rhe CoaliiOSI as a Whole takes a psition. ne nature of our Coalition is such 

that when we do take a Coalition pogition, each memberdoesnotmssarily SWbacribetoevery.s@tic 

recomsnendation, butrather suppona what we say as generally on rarget. 

Wheu only one or two of our members respond to a ~1 for COUMNZIU, we do not usually take a 

fOllrmlpositiou as a Cdida. In the ease of your ~M draft rqfl on identifying and re3p0tMing to 

poor performers, we received only one comment fromtheCitizenAdvocacyCenter(CAC).The 

COtmneM isenclosed,While1cannocstatethatCAC’scommentsrxnt theCoalition’sposition(since so few of our members chose to express a view), I can say &at they am qnite knowledgeable about this 

p~~ ~ q generallyrepresentthev~ewsofmosrCoalhion members. 

Thank you fortheopportunity tocomment.

Sincerely, 

BrianW.Lindberg 1 

ExecutiveDirector 

[IXugcomz.wps] 
C9mENTs 

en the


J2EPARTMKNT
OF HXALTH AND HUMAN$SRWCZS$ 

OFFICB OP INSPECTORGRNERAL 

DRAFT R8PORT 

‘The RMJIMcasemar Rwviaw Grgamisationet Role 

*	 Xdhntifpag and Req)ondsn$to Pees Pwfoxuem” 

hs#u8t,199s 

The Citizen Mvooaoy Centar ((SC) is a WL%queeuppoxt program 

for tml thouelacw of public maNbere who eerve on health Oara 

regulatoryboards end govern~ngbodlss as representativesOS the 

ooxammer Interest, Uhather appointed by govornose to serve on 

regulatory or other health policy boarda or @elected by private 

~ectsr institutionsand agencies to se- on boards or advisory 

panels, public anembers are typfcdly in the minority and are 

u8ually without the reaourceu and teuhrdod support available to 

theircounterpartsfromprotess~onaland businessoommunit$es. -C 

is a not-for-prof$t501(c)(3)arganimtion oreatsid to serve the 

publZcSntere8tbyprovid$q research,tsaining, teohxdcde upport, 

and networking oppcxtunit~ee to help public members make their 

wntr$buticm~ informed, affact%ve,and n$gnif%cxmt. 

OnaIof CAC’a networmi(caU6td“PROIWT”) is oompomd of the 

beneficiary members of the Boardtaof D~seotogS of the Me44csare 

Peer i?evXa$wOrganisationswhich are the sub$eot of this draft 

report . From time to tlam, PRONET takes positions on matters of 

particularinteresttu Mediaarabeneficiasiew, whioh inolude OIG 

reporte dealing with the performance@f PROS. In thi.a Xnstance, 

PEd!wErlMS&?t yetspo&en Onthedraft reportthatis thesaa@ject 

of @xe*e ~ts. At ite most racent annual meeting in 

GepWnk, 1995 4n S81t Lake City, Utah, PllONP?fmembers adopted a 

reeolut~on oalling on CAC to convenea fwzum where PRONETmember8 

would have an opportunityto review and debata the d$reot$on of 

the M@icer@ quality oversight program and to develop a “White 

Paper” on tha @ubject for presentationat the 1996 annual 

1

--

meeting. 1 !fhw, PROmr ts comments on the fhading8 end 

reemmendation8 in the OIG’s draft report w1ll be conta$nmdin 

that future document. me commentspxeeentedhere regleot the 

views of CAC* 

The OIG presents two major fhditqp: 

1) Ae tha PRO Program becomes inorees$ngly oommitted to 

improving the overallpraatlceof medicine, Its ability to 

find and take actkn on poorly performingphysiciansand 

hG8pita18 Ls questionable.


2) ‘NatBPR@ themselves i!indmuch that iz positive about the


ourmnt direotion of the Program. Sut some tmpralm


rs8e~ations about Atm ~mpact on protectingMedScere


benef$e%ar~esfrom poor performers.


M arrivingat finding#1, tha OXG concluded that PROW: 

- find’ thamaslvee with very limited leads t~ idantify 

#OOZIY performi~ @’&B~ChXW or hospitals): 

are unl~kelyto determinewhether inoidentethat are 

brought to their attsntion are $aolat@d Went@, Qr Jmrt19of 

a pattern M quwst~c?nable care; 

- sarely do more than inform those responeibla of the 

nature of a quality ag care problem when =na is oonfirmad; 

0 submit vktually no sanotion Iwwxxmandatione to the OZG 

(the number of sanctionmxxxwaendatiozm has deolin.d from a 

high Qf 72 in 1987 to only 13 in 1994): 

XxBfarvary few C86MMJto state boards of medicine,even 

%ough 1993 federalle$ialationrequires them to do sm. 

Xn arrivingat finding #2, the sMG coneludad that While 27 

of 22 PROIB(77%) believe that the two b8eZo PRO funetione 

improvtngthe Maimtream Qf care end dealing with poor pexferm6rn 

--are Compatible,59? of these same PROS have concluded that 

benefieiaxy protwtiorw?have become w~akam. 

Having made these two findingu,the OIG sug$eetadto the 

Hmalth Care Finmcin$ AdNMni8tratiUn (HCFA) that it has two 

options for the future. Thewa are: 

2 
--

OPTION1: The HCFA shouldprooeed toward diroctl~ th@ PR08 

to focus ex4u81vely on improv4ngth mainstreamof Oare. TQ help deal with poor per ftmnerw, it �hould oonsidarways

in whioh zha Federal governm9nt mdght auppoxt other bodies, 

@JUOh 8S State Madloal boards and ombudsmen,that are more 

f ooused on @8res6ing individualoasesof poor meditaal oare. 

OPTION2S The WFA should devote furtherinquiryto 

determine: (1) if the mm functiunsof improvingtha 

m8&netreamof aare and Sdentif yin$ and dealingoffeotivaly 

with poor performer8 can rea~onablybe Per$osmedby one 

oxganAz?xtton,and (2) hw PROS can carry out both 

u~multaneously, Toward that end, At oould support resaczwla 

6f fort8, damonstra~ionprojrectaby i.nd~vidualPROD, and


Oonferanoaar . 

13894nnix19with the FourthScopeof Work h i993, iiCFA 

dramatically olwnged tha primary funotion of the PROS, Thn PROS* 

naw assignmentwas to analyzmpatterns of oare and outcomes, and 

Ew@!J thie iIagorm@$On W%th tm mad~m~ COIUUUdty. moa aov’ed 

away ftom Aaadividuelchart reviuwdmignad to Ment%fy pmr 

performers, effeotLvely ending their role aa polioanen,em wLth 

wh$ch most PROS nmver seemed comftrtmbae. Organized med$cdmeand 

the pr@idez ooaununity reactedfavorablyto this Ohange in 

dimotion.


Bven durhg the yeare when PROS devotedmout ot their ensr@y 

to ohsrt ravigw, t?my were regulaxly or ftiaiamd fax doi~ a poor 

job of policing poor performers. They sent very fsW =WJCt$OZt 

rewmmendations to the OXG. Tht$y failedto davelepcoopemtiva

relationshipswith boardsof nwjdicine,whlohhave mom 

disciplinaryauthor$tyand broader powers to supplementPRO 

8anctionauthority, Very few quality of care cases have lxmn 

referred by PROS to state madicml boards. PRo$i tended to prefw 

aduoationalInterventions over 8anct&m30 Even 80, as an earlier 

OIG roport revealed, pm educationalinterwmticms fm-alW 

con8i#ted of notifying a provider of a mnfirmed quul$ty problem

and adcinfj the providar tc? dw eomethingabout it. 

While theZr operations have now changed under tlm Fourth and 

Fifth ScoptiIs of Work, PROS still retajxa the legal au12t0~lty and 

the duty to identify and dsal with poor perfomueru, PROS 

continue to reoe$ve oomplainte from beneflciarieaand have tha 

raspcxwibilttyfor addressingany qualityproblem revealed in 

theseOompla$nts.


CAC bel%eves that the 01(3 draft rmport accurately8tat0a the 

.Optione presentlybefore HCFa 1) to relieve PROE of 

Xeeponeibllity fgr dgal&ng with poor performers,or 2} to fi~ a 

way to reconcilethe apparentoonfl~et betweem this 

3 
--

reeponmibilityand tlw PRO*’pottern analyg$m qual&ty lmp~ 

activitlos. 

CAC reseweu f$nal judgment until PRONBTha* X m 

QEmJ=@@ty to - debata the PRO=’ qualsty Pfoteottioll 

role. Neverth@eea, we will way ~ha+ we +Unk a lot of 

Oonvinchg *4! needS tw justtfy oontirwingto sely on PR08to 

police poor pergcmmra. Given that PROB did an fnadequatejob of 

dealing w$th poor perfozmazs when th$u was one of their majer 

S96m8~&MXitiOS, whet 28 the evidenoethat PROU w4%1 do 8 mom 

~blo j+ ef POliCMMJ welity xblantm now tbt t~e has 

becomea lesser X?8Bp0n8ibility in the PRO Scepe of Work? It 

wouldbe 111.Ssl*ad4ng for PROS to hold thwwelves out as part @f a 

?sWety nea but fa$l to ~rovide meaningfulprotaotion. 

4 
PRONET Ri590LUT10NS passed at the Citizen Advoaacy (%ntw “PRON~ Annual 

NleeUng, September 28,1985. 

RESOLUTION REGAR!31NGTHE PRO BENEFICIARY COMPLAINT PROCESS 

WE, THE PRONET BENEFICIARYBOARDMEMBERSASSEMBLEDFOR THE 

1995 CITIZEN ADVOCACY CENTER “PRONET”ANNUAL MEETING IN SALT lAKE 

Cl’W, UTAH ON SEPTEMBER28, 1995, ENACTTHE FOLLOWING RESOLUTION IN 

CONCERN THAT A MORE EFFECTIVE AND MORE ACCOUNTABLE QUALllVRELATED COMPIANT PROCESS IS NECESS4RY TO ADEQUATELY PRC?TECT 

MEDICARE BENEFICIARIES: 

WHEREAS, the U.S. Departmentof I=k?afthand Human Senkes Office of the 

InspeotorGeneral(01(3)reoentlyrebimed a draftreporta$wsaing the PRO berietldary 

complaint prooess and found such complaints to be a rtoh souroe of qualm of care 

pmblem$ and oritical to the PROS’ abiiii to protect beneficiariesfrom individual 

instanow of pow care, and 

WHEREAS, mostbeneficiariesareunawareofthe PROoomphdntprocae6inapita 

of years of outreachaml pubticeducationefforts,and 

WHEREAS, majorbarrierato an affectivecomplaintprooess includethe current 

federal confidentialityrequirementsand the iengthyinvedgatian process, 

THEREFORE, BE IT RESOLVEI) THAT the PRONET Members attendingthe 

1995 Cflizen AdvooaoyCenter “PRONET’ Annual Meeting urge i+CFAto adopt 8fId 

implement the 0K3’a raoornmendd.ions,including: 

1.	 That i4CFAworkwithPROS te ident’Hycoat-effective waya to oomwt the 

fbws in the complaintprocessand requirePRO$to reepondsubstantiity 

to the complainantas wggested by the 01(3 report. 

2.	 That HCFA work Wth the Citizen Advocacy Center and AMPRA’s 

Commurhtions Network to ide~ mat-effective ways to enhance 

Medkare beneficiaries’avvarenesaof PRO$and the complaintprowss, in 

additionto the fifth Scope of Work oommunioationsdirectivesthat foous 

on HealthCare QualityImprovementin-Kiatives. 

3.	 That HCFA streamlinethe complaintproows in order to expedite the 

investigation and rospoma prooessm To thatend, PRONET urges HCFA 

to workwiththe CitizenAdvocacyCenterto collectinformationabout how 

otherhealthcareoversight@dkm such aa state Iicerwing boarda,ccmduot 

complaint inve5tigation6. 
RESOLUTION REGARDING A FORUM TO REVIEW AND DEBATE THE DIRECTION 

OF ‘THE MEDICARE QUALIIY OVERSIGHT PROGRAM AND 17S IMPACT ON 

MEDICARE BENEFICIARIES 

WE THE PRONET BENEFICIARY BOARD MEMBERS ASSEMBLED FOR THE 

1995 CITIZEfNADVOCACY CENTER “PRONET”ANNUAL MEETING lN SALT LAKE 

CITY, UTAH OhlSEPTEMBER28, 1995, ENACT THE FOLLOWING RESOLUTION IN 

CONCERN ABOUT CHANGES !N QUALITY OVERSIGHT BODIES FOR THE 

MEDICARE PROGI%AM: 

WHEREAS, there is a questionabout whetherthe PRO movement in today’s 

climateof deregulationandmajorchangesin thedelivefyof healthcare inthe Medioare 

program(and Medioaid,etc.) has beoomeirrelevantand veetigial,and 

WHEREAS,~ ‘ ae u oonoeptanda strategytirtho assuranceof quality 

owe for Medioarebeneficiarieshasbeenetfwtivelydismantledand the vast machinery 

ofthat systemuf review,overnightand l~teraotion hasbeen disassembledand itsvalue 

dissipated,and 

WHEREAS, there are varyingdeQW6 of imoeptance of these chartge6 by the 

medkd profedon, researchwmmunity, and Medbwe benefidarb, and 

WHEREAS, PRONET has not had the opportunityto date to 8dquately ooneider 

these varyingopinionsand developits own oolleotivepositionon how these ohartgee 

effeotthe quafii of heatthcare fromthe Medkare hmficiw)h PWWWVe, 

THEREFORE, BE IT RESOLVED THAT the IWONET M8mb9rS attendingthe 

18!MCitizen Advocacy Center“PRONET”AnnualMeetingurgeCACto 00nvarwa forUtll 

wherePRONET memberswouldhavean oppmtun”~to reviewand debatethe direction 

of the Medkare quaiii oversightprogram. 

BE fT FURTHER RESOLVEDTHAT this recommendationshouldbe given the 

highestpriority$0 that the PRONET SteeringCommitteecan developa “WhitePaper” 

thatreflectsthe colleotiiethinkingofthe PRONET mernbwshipto be pnmentedduring 

the 1906 CitizenAdvocaoyCenterAnnualMeeting. 

RESOLUTION REQAR9NW THE tICFA CONTRACT BIDDING PROCESS 

WE, THE PRONET BENEFICIARYBOARI) MEMBERS ASSEMBLED FOR THE 

1995 CITIZEN ADVOCACY CENTER PRONET ANNUAL MEETING IN SALT LAKE 

CITY, UTAH ON SEPTEMBER28, 1995, ENACTTHE FOLLOVViNGRESOLUTION: 

BE IT RESOLVED THAT the PRON~ Mernbwe attending the 1$95 Cit&en 

Advooacy Center PRONET Annual Meeting u~e the Health Care Financing 

Administration(I+CFA)to reassessitsrule~governingthe PRO contractbiddingprcxwm 

for designatinga PRO ina Sivenstatetoassurerrwixlnwmfairnessand aquaiapplication 
APPENDIX F


NOTES 

1. The Institute of Medicine, Medicare: A Strategy for Qualizy Assurance (Washington, 

D. C.: National Academy Press, 1990). 

2.	 U.S. Department of Health and Human Services, Office of Inspector General, The 

Utilization and Quality Control Peer Review Organization Program: Qualip Review 

Activities, OAI-01-O0570, September 1988; The Utilization and Quality Control Peer 

Review Organization Program: Sanction Activities, OAI-01-88-00571, November 1988; 

The Utilization and QualiV Control Peer Review Organization Program: An Exploration 

of Program Effectiveness, OAI-01 -88-00572, February 1989; Educating Physicians 

Responsible for Poor Medical Care: A Review of the Peer Review Organizations’ E#orts, 

OEI-01-89-00020, February 1992; Peer Review Organizations and State Medical Boards: 

A Vital Link, OEI-01-92-00530, April 1993; The Sanction Referral Authori@ of Peer 

Review Organizations, OEI-01-92-00250, April 1993; and The Beneficiary Complaint 

Process of the Medicare Peer Review Organizations, Draft Report, OEI-01-93-00250, 

June 1995. 

The Office of Inspector General has also issued a number of reports on DRG validation. 

3. Reflects reviews completed under the fourth contracts. The HCFA staggers the 

starting dates of the PROS’ contracts, thus some PROS began their fourth contract in 

April 1993, some in July 1993, and some in October 1993. 

4.	 The volume of random sample medical record reviews has historically been so large 

that even with such a low confirmation rate, the majority of quality-of-care problems 

stemmed from those reviews. 

5. Hebbel and McMullan to Executive Directors, Peer Review Organizations, 

20 December 1994, Health Care Financing Administration, Baltimore, MD. 

6.	 Other than beneficiary complaints, PROS are mandated to review the following types 

of cases: Assistant at Cataract Surgery, Medicare Code Editor, Hospital Adjustment, FI 

referral, RO referral, and Hospital Issued Notice of Noncoverage (HINN). The PROS 

will also continue to do some miscellaneous reviews. However, the most fruitful source 

among the miscellaneous reviews--the readmission reviews, which accounted for 

9 percent of the 6,010 confirmed quality-of-care problems that PROS identified--will also 

be eliminated. 

7. The Beneficiary Complaint Process of the Medicare Peer Review Organizations. 

8. Those who offered an estimate reported having received one or two or a few such 

referrals. 

F-1 
9. Those whooffered anestimate repofied having received between one and four 

referrals from hospitals. Nine of those who offered an estimate on physician referrals 

reported having received either a small number or between 1 and 4 such referrals; 

1 reported having received 6; and 2, 10 or more. 

10. We understand that PROS, through their HCQIP cooperative projects with hospitals, 

could identi~ instances of poor performance. However, unless the questionable care is so 

egregious as to prompt a sanction recommendation, it will be excluded from the historical 

data bases of quality-of-care problems that PROS monitor for patterns to emerge. 

11. As required in their contracts, the PROS also profile quarterly all the quality-of-care 

problems they have identified. This activity does not involve reviewing additional case 

records on a particular provider but is simply a method for monitoring the PROS’ pool of 

quality-of-care problems to identify patterns of poor care. 

12. In determining whether an individual quality-of-care problem would result in an 

improvement plan, the PROS considered the existence of a pattern of quality-of-care 

concerns or problems and severity of the problem/harm to the patient. Some PROS 

reported also having considered whether the problem could be corrected, the receptivity of 

the physician or hospital involved, and the opinion of the medical director. 

13. U.S. Department of Health and Human Services, Office of Inspector General, 

Hospital Reporting to the National Practitioner Data Bank, OEI-01-94-00050, February 

1995. 

14. The National Practitioner Data Bank, established in the Health Care Quality 

Improvement Act of 1986, maintains records of medical malpractice and adverse actions 

taken by hospitals, other health care entities, licensure boards, and professional societies 

against licensed health care professionals. Hospitals and other health care entities must 

report to the Data Bank all adverse actions they take that affect a practitioner’s clinical 

privileges for more than 30 days. 

15. We reported that the unwilling and unable requirement remained an obstacle despite 

the Administrative Conference of the United States referring to it as an “inappropriate” 

burden of proof in 1989 and Congress’ attempt to make it more workable in the Omnibus 

Budget Reconciliation Act of 1990 (P.L. 101-508). 

The PROS cited the high costs, the complexity of balancing physicians’ rights to due 

process with the beneficiaries’ need for quality, and the confusing instructions from 

HCFA and OIG. 

See The Sanction Referral Authority of Peer Review Organizations. 

16. Federation of State Medical Boards of the U. S., Inc., Annual Board Action Statistical 

Package, April 5, 1995. 

F-2

Many medical boards are beginning to devote more attention to quality-of-care cases. But 

most disciplinary actions taken by boards still focus on other issues, such as drug and 

alcohol abuse, sexual abuse, and criminal violations. 

17. Concerns about violating confidentiality requirements explain, at least in part, why so 

little sharing has occurred. In 1990, Congress passed legislation calling for the PROS to 

share information with the boards, but it has had little if any effect. It included a 

provision that the sharing occur after the PROS’ grant physicians “notice and hearing. ” 

Because of uncertainty about the meaning of this “notice and hearing” provision, however, 

PROS still shared little information with the boards. (see The Peer Review Organizations 

and State Medical Boards: A Vital Link) 

18. Citizen Advocacy Center, Information Exchange Between Peer Review Organizations 

and Medical Licensing Boards: Update and Repoti on CAC Survey, March 1992, and 

Information Exchange Between Peer Review Organizations and Medical Licensing Boards: 

Repoti on the 50 State Survey, November 1992. 

19. The Center identified Alabama, California, Colorado, Iowa, Minnesota, Mississippi, 

Ohio, Rhode Island, West Virginia, and Wisconsin as States with medical boards and 

PROS both committed to sharing information. 

20. For example, the New York PRO initiated a cooperative project aimed at improving 

prophylactic antibiotic administration. It collaborated with more than 70 hospitals to 

conduct this project and, based on the project’s feedback, these hospitals are changing 

their antibiotic administration policies. (from “IPRO Works with Hospitals to Implement 

Feedback Effort, ” IPRO Quality Initiatives, Winter 1995.) 

Another example involves the Alabama PRO’s use of data from the large-scale 

Cooperative Cardiovascular Project. By working with the PRO, one hospital in Alabama 

increased the proportion of patients receiving beta blockers when indicated from one-third 

to all. It also increased the post-heart attack administration of aspirin from 70 percent to 

95 percent of eligible patients. (from Linda Oberman Prager, “Undoing Case Review, ” 

American Medical News, June 26, 1995.) 

F-3