Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

AUGUST 2001 

OEI-01-00-00060 

The Medicare Beneficiary Complaint Process 

A Rusty Safety Valve 
OFFICE OF INSPECTOR GENERAL 

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

protect the integrity of the Department of Health and Human Services programs as well as the 

health and welfare of beneficiaries served by them. This statutory mission is carried out through 

a nationwide program of audits, investigations, inspections, sanctions, and fraud alerts. The 

Inspector General informs the Secretary of program and management problems and recommends 

legislative, regulatory, and operational approaches to correct them. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) is one of several components of the Office of

Inspector General. It conducts short-term management and program evaluations (called

inspections) that focus on issues of concern to the Department, the Congress, and the public. 

The inspection reports provide findings and recommendations on the efficiency, vulnerability,

and effectiveness of departmental programs. 

OEI's Boston Office prepared this report under the direction of Mark R. Yessian, Ph.D.,

Regional Inspector General. Principal OEI staff included:

BOSTON HEADQUARTERS

Joyce M. Greenleaf, Project Leader Bambi Straw, Program Specialist

Chaletta M. Clark, Program Analyst

Steven P. Keenan, Program Analyst

To obtain copies of this report, please call the Boston Regional Office at 617-565-1050. 

Reports are also available on the World Wide Web at our home page address: 

http://oig.hhs.gov/oei 
EXECUTIVE SUMMARY 

PURPOSE 

To reevaluate the effectiveness of the beneficiary complaint process of the Medicare Peer 

Review Organization program. 

BACKGROUND 

Complaints as a Means to Oversee Quality of Care 

Complaints can serve as a means of identifying practitioners and providers who pose harm 

and, if necessary, triggering interventions and follow-up. Since 1987, the Medicare 

beneficiary complaint process has been a statutory responsibility of Medicare Peer Review 

Organizations (PROs). 

Previous Office of Inspector General Report 

In 1995, the Office of Inspector General issued a report on the PROs’ beneficiary 

complaint process that identified three flaws: (1) Federal confidentiality regulations 

precluded the PROs from responding to complainants in a meaningful way, (2) PROs 

received too few complaints to identify patterns of poor care, and (3) the complaint 

process was lengthy. The Centers for Medicare and Medicaid Services (CMS, formerly 

the Health Care Financing Administration) responded positively to our report. It worked 

on revising the confidentiality regulations, but reports that it has been unable to publish a 

final rule. 

This Inquiry 

This inquiry reexamines the PROs’ complaint process. It is based on a mail survey to 

PROs, aggregate data on PRO complaints, site visits to 3 PROs, a review of 82 complaints 

at those 3 PROs, PRO budget data, and stakeholder discussions, among others. 

THE SIGNIFICANCE OF THE PROs’ COMPLAINT PROCESS 

Two main reasons underscore why the complaint process is an important safety valve: 

Identifying Instances of Poor Care. On average, the PROs identified quality problems 

in 13 percent of medical record reviews initiated by complaints between August 1997 and 

July 1999. They identified such serious concerns as inappropriate transfer, delay in 

treatment, and missed medications, among others. 

Limits to Other Complaint Processes. Professional licensing boards have historically 

struggled with quality-of-care complaints. The Joint Commission on Accreditation of 

The Medicare Complaint Process: A Rusty Safety Valve i OEI-01-00-00060 
Healthcare Organizations gives complaints limited attention during its surveys. The 

medical malpractice system tends to have long delays and financial costs that work against 

Medicare beneficiaries in malpractice litigation. 

FINDINGS 

The PROs’ Complaint Process is an Ineffective Safety Valve for

Medicare Beneficiaries. It Has Improved Little Over the Past 5 Years. 

Its accessibility is questionable. We called 10 PROs and repeatedly reached busy 

signals at 2, reached recordings at 2, and were referred to a licensure board by another. 

PROs report that beneficiaries often lack a clear understanding of the complaint process. 

It rarely triggers any intervention beyond a letter for substantiated complaints. 

PROs called for a corrective action in 6 of 66 complaints with confirmed concerns that we 

reviewed. They involved clarifying policies or conducting in-service training. 

It fails to provide a meaningful response to complainants. Current procedures 

requiring physician consent before PROs can share their review results with complainants 

continue to preclude the PROs from responding substantively to complainants. 

PROs Face Two Major Obstacles to Achieving a More Effective Beneficiary 

Complaint Process. 

CMS’ contracts with PROs treat complaints as a distinctly minor activity. The 

contracts stress quality improvement and payment error reduction. 

The PROs tend to be more oriented toward the medical community than to the 

beneficiary community. This helps them in conducting quality improvement projects but 

can hinder them in developing a more effective beneficiary complaint process. 

RECOMMENDATION 

CMS should provide Medicare beneficiaries with an effective complaint process 

that meets the eight criteria identified in our template. 

In our draft report, we presented a series of recommendations on how CMS could achieve 

an effective complaint process. In this final report, we have revised our recommendations 

and present CMS with two options on how it can achieve this. 

Option 1: CMS could fix the complaint process within the existing PRO program. 

Toward that end, CMS must make the beneficiary complaint process a prominent part of 

the PRO program, specify its expectations of an effective process through its contracts, 

consider different contracting approaches, and hold the PROs more accountable for 

providing an effective complaint process. 

The Medicare Complaint Process: A Rusty Safety Valve ii OEI-01-00-00060 
Option 2: CMS could establish a complaint process outside of the PRO program. 

This option represents a significant departure from how CMS has handled beneficiary 

complaints to date and would require legislative change. CMS could establish an entirely 

new program or contract mechanism focused on complaints and beneficiary outreach. It 

could develop new mechanisms, such as mediation, for dealing with certain types of 

complaints. Or it could build on existing entities that already conduct similar work, such 

as State survey and certification agencies, State medical licensure boards, and the State 

Health Insurance Partnership Program. 

. 

Issues for CMS to Consider 

The two options above have advantages and disadvantages for CMS to weigh as it 

considers how to best achieve effective complaint process for beneficiaries. Below we 

highlight those issues we consider as paramount. 

• To what extent would establishing a complaint process outside of the PROs isolate the 

PROs from beneficiaries, who are the centerpiece of CMS’ programs? 

• To what extent would fixing the complaint process within the PRO program exacerbate 

the tension between the quality improvement and complaint responsibilities of the 

PROs? 

• To what extent does each option require legislative and regulatory changes to ensure 

that the complaint process functions with the appropriate authority and scope? 

• What are the resource implications of each option? 

COMMENTS 

CMS did not provide detailed comments on the recommendations in our draft report. We 

look forward to receiving such comments in response to this final report. We solicited and 

did receive comments from the American Health Quality Association, Citizen Advocacy 

Center, AARP (formerly the American Association of Retired Persons), and the American 

College of Physicians-American Society of Internal Medicine. All commenters agreed 

that an effective complaint process is important for Medicare beneficiaries and that the 

PRO program’s focus on quality improvement is an appropriate one that can co-exist with 

a more effective complaint process. Some offered further recommendations, such as an 

informal complaint resolution process or options for contract changes. We urge CMS to 

consider these comments. 

The Medicare Complaint Process: A Rusty Safety Valve iii OEI-01-00-00060 
TABLE OF CONTENTS 

PAGE

EXECUTIVE SUMMARY

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

SIGNIFICANCE OF THE PROs’ COMPLAINT PROCESS ...................... 4

FINDINGS

Complaint Process is an Ineffective Safety Valve ............................... 6

Obstacles to a More Effective Complaint Process .............................. 14

RECOMMENDATION ........................................................ 16

COMMENTS on the DRAFT REPORT .................................... 21

APPENDICES

A: Profile of Complaints Reviewed ........................................ 23

B: Comments on the Draft Report ......................................... 26

C: Endnotes ........................................................... 49

The Medicare Complaint Process: A Rusty Safety Valve OEI-01-00-00060 
INTRODUCTION 

PURPOSE 

To reevaluate the effectiveness of the beneficiary complaint process of the Medicare Peer 

Review Organization program. 

BACKGROUND 

The Complaint Process as a Means to Oversee Quality of Care 

The Centers for Medicare and Medicaid Services (CMS, formerly the Health Care 

Financing Administration) relies on a variety of quality oversight mechanisms to ensure 

that high quality health care and services are delivered to Medicare beneficiaries. One of 

these mechanisms is the complaint process, contractually administered by the Medicare 

Peer Review Organizations (PROs). The PROs’ complaint process provides Medicare 

beneficiaries and their families a forum to have their complaints taken seriously and 

investigated appropriately. It also complements other oversight efforts, ranging from 

surveying hospitals to collecting data on performance measures. 

Providing a complaint process specifically for Medicare beneficiaries has been a 

responsibility of the PROs since 1987, when Congress enacted the Omnibus Budget 

Reconciliation Act of 1986.1 That law mandates that PROs conduct “an appropriate 

review of all written complaints about the quality of services” paid for by Medicare, 

inform the beneficiary or representative of the final disposition of the complaint, and 

provide the practitioner and/or provider concerned with reasonable notice and opportunity 

for discussion.2 

Previous Office of Inspector General Report 

In 1995, the Office of Inspector General (OIG) issued a report on the PROs’ beneficiary 

complaint process.3 In that report we found the PROs’ complaint process to be flawed in 

three significant ways: (1) Federal confidentiality regulations precluded the PROs from 

responding to complainants in a meaningful, substantive way, (2) PROs received too few 

complaints to identify patterns of poor care, and (3) the process of investigating and 

responding to complaints was lengthy. Furthermore, we found that Medicare beneficiaries 

were often unaware of their opportunities to complain to PROs about the quality of their 

medical care. 

Based on those findings, we recommended that CMS give the highest priority to requiring 

PROs to respond in a substantive manner to the complainant. We also called for CMS to 

enhance Medicare beneficiaries’ awareness of PROs and the complaint process, and to 

streamline that process. 

The Medicare Complaint Process: A Rusty Safety Valve 1 OEI-01-00-00060 
CMS responded positively to our report. It assigned a taskforce (part of the Medicare 

Technical Advisory Group) the responsibility to improve the complaint process in light of 

the flaws we identified. That task force included representatives from CMS, the PROs, 

the American Medical Association, AARP (formerly the American Association of Retired 

Persons), the American Hospital Association, and the Citizen Advocacy Center, among 

others. The task met regularly in the period following the 1995 OIG report. 

As a result of recommendations made by the task force, CMS changed its guidelines for 

how long the complaint process should take, dropping the total days allowed from 250 to 

165 days and developing model letters to improve the readability of PRO responses to 

complainants.4 It also conducted three pilot programs to explore new approaches to 

different aspects of the complaint process (mediation to resolve complaints, structured 

implicit review to assess medical records, and various changes in investigating and 

managing complaints).5 However, it has yet to respond to the findings and 

recommendations from the pilot evaluation. 

CMS also began the process of revising the confidentiality regulations, but faced 

considerable hurdles in issuing a rule to allow a substantive response to complainants 

without explicit physician consent. CMS reports that it has been unable to publish the 

rule. It was on hold for over a year and withdrawn as of February 13, 2001, according to 

CMS’ Unified Agenda, the semiannual regulatory agenda published May 14, 2001.6 

This Inquiry and Report 

Having released our previous report 5 years ago, we now take a second look at the PROs’ 

beneficiary complaint process. This inquiry and report focus on the effectiveness of the 

complaint process and its role as a quality oversight mechanism. We exclude any 

examination of other major aspects of the PROs’ work, such as quality improvement 

projects and the payment error reduction program. 

Our inquiry drew on several data sources. We received national budget data for the fifth 

and sixth contract periods from CMS.7 We collected information from CMS’ data 

contractor on the volume and outcome of beneficiary complaint reviews as well as the 

type of and audience for PRO outreach efforts from August 1997 through July 1999. We 

also conducted a mail survey of the PROs in each State plus the District of Columbia, for 

which we achieved a 100 percent response rate.8 In addition to completing the survey, we 

asked each PRO to provide us with 3 examples of recent responses to beneficiary 

complaints; we received 101 such responses.9 We visited 3 PROs of different sizes in 

States representing 15 percent of the beneficiary population. While on site, we 

interviewed staff involved in complaints and reviewed 82 completed beneficiary 

complaint files, 16 of which involved no confirmed quality-of-care problems and 66 of 

which involved at least 1 confirmed quality-of-care problem. We also interviewed 

stakeholders in CMS, the American Health Quality Association (of which PROs are 

members), AARP, and the Citizen Advocacy Center (which represents public members of 

PRO boards, among others). Finally, we reviewed relevant laws and documents, such as 

the PRO manual and the pilot evaluation, The Medicare Beneficiary Complaint 

Alternative Methods Study, among others. 

The Medicare Complaint Process: A Rusty Safety Valve 2 OEI-01-00-00060 
We conducted this study in accordance with the Quality Standards for Inspections issued 

by the President’s Council on Integrity and Efficiency. 

The Medicare Complaint Process: A Rusty Safety Valve 3 OEI-01-00-00060 
THE 

PROs’ COMPLAINT 

SIGNIFICANCE OF THE

PROCESS 

In 1995, CMS set forth its vision of the successful PRO in 5 years. CMS envisioned that 

the PROs will “have earned a position of trust in the eyes of plans, providers, and 

practitioners and beneficiaries . . .based on responsive investigation of complaints and 

protection of consumers.”10 

Five years have passed since CMS wrote this vision statement. The PROs’ complaint 

process, mandated by statute, continues to serve as the key instrument for protecting the 

38 million Medicare beneficiaries from practitioners and providers who pose harm. The 

complaint process can act as a means of identifying such practitioners and providers and, 

if necessary, triggering appropriate interventions and follow-up. This corresponds with 

one of the three purposes of the PRO program that CMS defined in its recent contract with 

the PROs: to protect Medicare beneficiaries. 11 

Below we identify two main reasons that underscore why the complaint process is an 

important safety valve in quality oversight. 

Identifying Instances of Poor Care 

Complaints can expose serious instances of substandard care. In the 2-year period from 

August 1997 through July 1999, PROs completed 9,099 medical record reviews in 

response to complaints. On average, PROs identified problems in 13 percent of those 

reviews. Our previous inquiry reported similar proportions of confirmed reviews: across 

all PROs, between 10 and 15 percent of reviews initiated by complaints led to at least 1 

confirmed problem.12 Notably, according to the more recent data, 3 PROs confirmed 

problems in as many as 29 percent of records reviewed. 

From our complaint file review, we found several examples of patient risk and harm that 

PROs identified and confirmed as problems through the complaint process. These 

examples represent technical quality concerns, which deal with clinical decisions and 

expertise: 

C Inappropriate transfer. During bladder surgery in an ambulatory surgical center, a 

beneficiary suffered complications that were improperly treated. The surgical center 

transferred him by wheelchair to a hospital six blocks away. A PRO physician 

reviewer called this transfer method “repulsive” and “negligent” because the ailing 

beneficiary was wheeled down the street dressed in a hospital gown with his family 

following him. 

C Delay in treatment. A beneficiary experienced a sharp decline in health due to a 

delay of treatment for an abdominal aortic aneurism. 

The Medicare Complaint Process: A Rusty Safety Valve 4 OEI-01-00-00060 
C Missed medications. For 6 days after being transferred from a hospital to a skilled 

nursing facility, a beneficiary failed to receive his medications as ordered by his 

physician to treat his heart failure and lung problems, despite continued complaints to 

the nursing home staff from his wife. 

Each of the examples above concerned the technical quality of care. But we also found 

complaints that alleged problems with the quality of services, such as facility 

maintenance, communication, and staff attitudes. One PRO official characterized these 

service concerns in terms of beneficiaries’ perception of and overall satisfaction with their 

health care experience. For example, a beneficiary’s daughter complained that her mother 

was confused about caring for her eye after cataract surgery because her physician failed 

to clearly communicate follow-up instructions. Another beneficiary complained that staff 

in his skilled nursing facility placed him in a wheelchair that was insufficiently cleaned of 

urine. Service quality concerns that are ongoing, particularly in long-term care, can affect 

residents’ and patients’ quality of life. 

See appendix A for more details on the complaints we reviewed. 

Limits to Other Complaint Processes 

Several entities other than PROs address quality-of-care complaints from Medicare 

beneficiaries as well as from the general population. But each entity has some limits. 

Hospitals and most other health facilities have their own internal complaint mechanisms, 

but are limited to those specific facilities. State survey agencies that certify facilities for 

Medicare consider complaints a priority, but focus on those that relate specifically to the 

Medicare conditions of participation and can only address provider concerns. The Joint 

Commission on Accreditation of Healthcare Organizations, which accredits most hospitals 

that participate in Medicare, gives complaints limited attention during its surveys and 

rarely schedules special surveys in response to complaints.13 Ombudsmen programs serve 

as advocates for residents in long-term care facilities and often investigate complaints, but 

generally lack clinical expertise to review medical records. Professional licensing boards, 

such as those that license physicians, routinely respond to complaints, but have 

historically struggled with quality-of-care complaints.14 

Medicare beneficiaries can also choose to pursue complaints through the courts. 

Malpractice court cases can address quality concerns, but memory lapses, pretrial delays, 

and limited finances tend to work against the elderly and ill in malpractice litigation, 

which is often lengthy and expensive. Moreover, malpractice attorneys working on a 

contingency fee basis have less incentive to accept retired or elderly clients such as 

Medicare beneficiaries who may receive minimal monetary awards from lost work 

earnings.15 

The Medicare Complaint Process: A Rusty Safety Valve 5 OEI-01-00-00060 
FINDINGS 

The PROs’ complaint process is an ineffective safety valve for

Medicare beneficiaries. It has improved little over the past 5 

years. 

We developed a template for an effective complaint process based on prior inspection 

work on dialysis facility oversight.16 In testimony before Congress on dialysis facilities, 

CMS endorsed the elements as essential to an effective complaint system.17 We think it is 

just as relevant to the complaint process of Medicare PROs. The table below profiles the 

elements in our template and how well PROs fared in each element. 

Element Characteristics of an 

Effective Complaint 

Process 

Characteristics of the 

PRO Complaint Process 

1. Accessibility Complainants are aware of the system 

and find it easy to use. 

Hotline calls are inconsistently answered. 

Success of PRO outreach is unknown. 

2. Investigative 

capacity 

Appropriate experts, resources, and 

methods are available to assess 

complaints and determine if they are 

part of an underlying pattern. 

PROs rely on medical record review, which is 

their strength, but they are unlikely to identify 

patterns. Medical record review is limited to 

addressing technical quality concerns. 

3. Interventions and 

follow-through 

Substantiated complaints result in 

appropriate corrective action. 

Monitoring assures compliance. 

Most common interventions are letters. 

Corrective actions are rare. Few referrals to 

other entities. Little follow-up. 

4. Quality 

improvement 

orientation 

Complaints guide quality 

improvement efforts. 

Quality improvement projects rarely stem 

from complaints: only one PRO implemented 

a project based on complaints. 

5. Responsiveness Responses to complainants are 

regular, substantive, and clear. 

Current procedures continue to preclude 

PROs from responding substantively; 

physicians often fail to consent to disclosure. 

PROs vary in their responses; they report that 

beneficiaries are frustrated. 

6. Timeliness Each step is completed within an 

established, reasonable time frame, 

and mechanisms exist to deal with 

emergent complaints in an expedited 

manner. 

Most complaints exceed the established 

timeframes for reviewing complaints. 

7. Objectivity The review process is unbiased, 

balancing the rights of each party. 

Information gathered suggests that the 

process is fair. 

8. Public 

accountability 

Complaint information is made 

available to the public. 

Little complaint information is publicly 

available. 

The Medicare Complaint Process: A Rusty Safety Valve 6 OEI-01-00-00060 
Five years ago we examined the PROs’ beneficiary complaint process and found it to be 

seriously flawed. This time, we examined it more closely, gauging it by each element in 

our template. What we found was a complaint system that falls short in each element, with 

the exception of objectivity. Beneficiaries looking for an easy-to-use complaint system 

that will hold physicians and facilities accountable for quality-of-care problems and 

respond to beneficiaries in a meaningful way will be left frustrated and disappointed by the 

PROs’ beneficiary complaint process. Below we offer, in more detail, our assessments of 

the major elements in our template. 

Accessibility 

An effective complaint process is widely known and easy to use. 

Accessibility is questionable. Our experience calling a sample of PROs raised 

concerns about how easily beneficiaries can access information through the toll-free 

numbers that PROs maintain. Though PROs train staff to assist beneficiaries in submitting 

complaints, we had trouble reaching such trained staff (see box). 

In addition to calling 10 PROs, we 

called 1-800-MEDICARE, the phone 

number for a Medicare information 

hotline, which is commonly included 

on Medicare publications. The first 

day we reached a busy signal. 

Calling again the next day, we 

reached a recording that presented no 

menu option for PROs or for qualityof-care concerns. Although CMS has 

not measured the accuracy of PRO 

information provided by telephone, it 

reported that in 1999 only two of 

three Medicare beneficiaries received 

responsive answers from Medicare 

sources, meaning one of every three 

received either no answer or an 

incorrect answer.18 

According to our PRO survey, even 

Calls to 10 PROs 

We called PROs in 10 States containing 54 percent 

of the Medicare population and asked operators to 

explain how a beneficiary with a quality-of-care 

complaint can use the PRO complaint process. 

2 Calls Reached Busy Signals. Repeated attempts 

over several hours resulted in busy signals. 

2 Calls Reached Recordings. One requested an 

access code, without explanation. One 

recorded phone numbers for return calls. 

6 Calls Reached Operators. One provided us with 

contact information for the State medical 

board, and explained that the board is the 

appropriate place for Medicare 

beneficiaries to bring quality-of-care 

complaints. One transferred us to a voice 

mail system without providing any 

information. Four provided accurate 

information. 

beneficiaries who are aware of the PROs often lack a clear understanding of the complaint 

process. Many PROs identified inadequate beneficiary understanding of the complaint 

process as a barrier to achieving effectiveness.19 

All PROs conduct outreach to improve beneficiary awareness and understanding of the 

complaint process. The most common outreach activities are presentations at venues such 

The Medicare Complaint Process: A Rusty Safety Valve 7 OEI-01-00-00060 
as area agencies on aging and senior centers. Many PROs also coordinate outreach with 

State Health Insurance Partnership programs, Departments of Public Health, and the Social 

Security Administration, among others. However, PROs are not required to coordinate 

their outreach efforts with other relevant State entities. PRO contracts merely require them 

to take note of and avoid duplicating the outreach efforts of others.20 

The effectiveness of these outreach efforts, however, is unknown. For example, States 

conducting the highest rates of outreach do not necessarily have the highest rates of 

complaints, as measured by how many medical records they review.21 Outreach budgets 

are limited; under the fifth contract, average outreach spending constituted about 6 to 7 

percent of the total PRO budget.22 Despite CMS’ target to improve beneficiary education 

in its FY 2000 Performance Plan, the level of outreach funding did not change significantly 

under the sixth contract.23 

Investigative Capacity 

An effective complaint process has the appropriate experts, resources, and methods 

available to assess complaints. 

Strength in medical record review. PROs review medical records to investigate 

complaints. They have not only the expertise necessary for reviewing medical records, but 

also the authority to request the medical records, plus the access to the medical specialists 

needed for such reviews. PROs have a depth of experience in reviewing medical records 

that CMS, State survey agencies, and others are hard-pressed to match. 

PROs request only those medical records related to the complaints they receive. This often 

means they review multiple records. In our review of 82 complaints, 20 complaints 

involved 2 care settings and 5 involved 3 care settings—which meant these PROs reviewed 

at least 55 records for those 25 complaints. 

Unlikely to review a sample of records. PROs tend to treat complaints as individual 

incidents, rather than as potential signs of systemic problems. When a PRO confirms a 

quality-of-care concern in a particular record, it is unlikely to pull extra records to 

determine whether an underlying pattern exists. PROs do have the authority to review 

extra records under such circumstances, but are unlikely to know whether the medical 

licensing board, State survey agency, or other overseer is investigating the same physicians 

or facilities. Without such knowledge or additional reviews, the likelihood of documenting 

a pattern based only on PRO data is low. One PRO medical director noted that identifying 

a pattern relies on “corporate memory.” According to the responses to our survey, just 9 of 

50 PROs identified a pattern of concerns based on reviewing complaints under their fifth 

contract, a period exceeding 3 years. 

Limits of medical record review. While medical record review is well-suited to 

investigating complaints about technical quality of care, PROs also receive complaints 

The Medicare Complaint Process: A Rusty Safety Valve 8 OEI-01-00-00060 
concerning service quality. Medical records shed little light on those concerns. We asked 

officials at 24 PROs how they handled service quality, such as complaints about 

communication or facility maintenance. Twenty-two indicated they referred those 

complaints to others.24 They simply consider service-related complaints non-PRO issues. 

Among the 20 service-related concerns we identified during our on-site review of 

complaints, we saw documentation that PROs referred 2 to another entity. According to 

our site visits, PROs rarely hear back any results of investigations on referred complaints. 

Finally, PROs do little beyond the medical record review to investigate complaints, and are 

not expected to do more. They do not routinely conduct interviews with the parties 

involved, although in many cases, some semblance of a beneficiary interview occurs if a 

beneficiary complains to the PRO hotline staff, who then translate the complaint into 

writing.25 

Interventions and Follow-Through 

An effective complaint process triggers appropriate interventions and monitoring 

based on substantiated complaints. 

Most common interventions are letters. PROs rarely take any action beyond a 

notification letter to providers and practitioners in response to confirmed quality concerns 

based on complaints. PROs consider these letters to be educational interventions because 

they include references to how the care should have been handled by the physician or 

facility. PROs generally prefer these educational approaches, finding them more in line 

with the quality improvement orientation that is a centerpiece of their contracts. We 

reviewed 66 complaints with confirmed concerns. A PRO confirms a concern only after 

multiple layers of review, including an opportunity for the physician and provider in 

question to comment or provide additional information. In each of those 66 cases the PRO 

responded with such a letter.26 

Occasionally, PRO interventions exceeded the notification letter. In 6 of the 66 complaints 

with confirmed concerns, the PROs, based on the severity of the review findings, also 

called for a corrective action plan. In five of those six, the PRO found the facility 

responsible for the quality-of-care concern; in one case, the physician. PROs called for 

corrective action aimed at preventing further problems, including updating or clarifying 

policies or conducting in-service training. We saw no examples of a PRO calling for 

remedial training, coursework, or special supervision. Furthermore, we saw little evidence 

of particular follow-through by the PRO to ensure that the facilities had, in fact, changed 

their policies. We found no example of a PRO pulling extra records for review to 

determine if the problem persisted, for example. In each case, the PROs’ letters indicated 

that the problem would be entered into a database and tracked to determine whether a 

pattern developed—but one medical director told us that little tracking actually occurred.27 

The Medicare Complaint Process: A Rusty Safety Valve 9 OEI-01-00-00060 
Referrals to licensing boards rare. More serious interventions, such as referring a 

physician to the State medical board based on the findings of a medical record review, were 

even rarer.28 We surveyed the PROs about such referrals based on beneficiary complaints. 

Just 9 of the 50 PROs that responded to our survey reported making such a referral at least 

once during their fifth contract—a period that exceeded 3 years. Likewise, PRO referrals 

to State survey and certification agencies are uncommon: six PROs reported making such 

referrals for confirmed concerns during their fifth contracts.29 

Patterns difficult to establish. PROs cite the need for establishing a pattern of 

concerns through medical record review before applying an intervention beyond the 

traditional notification letter.30 Determining whether a concern is part of a larger pattern is 

crucial for the PROs to determine an appropriate intervention. However, establishing a 

pattern is increasingly difficult because they lack the volume of case review to identify a 

pattern. They do, however, have the authority to investigate whether a larger pattern exists 

by requesting additional cases to review.31 But they rarely invoke it. In responding to our 

survey, 9 out of 50 PROs reported identifying a pattern of quality concerns based on 

complaints during the whole fifth contract period. 

Occasional voluntary corrective actions. Sometimes facilities took initiatives to 

implement corrective actions before the PROs even confirmed that a quality-of-care 

concern existed. In those cases, the facilities took action based on the PROs’ letter 

indicating that a potential quality-of-care concern existed. In those cases, the facilities 

were generally familiar with the PRO review process. In our review, we found six 

examples of such voluntary corrective actions. Four involved hospitals; one, an 

ambulatory surgical center, and; one, a skilled nursing facility. In each case, the voluntary 

actions involved improved or changed policies or in-service training. 

Mediation represents a questionable alternative intervention. Five PROs 

piloted mediation as an alternative for resolving beneficiary complaints.32 In theory, 

mediation holds promise. It attempts to resolve disputes for beneficiaries by bringing 

together the beneficiary and provider or practitioner with a skilled mediator to foster 

agreement. However, the pilot—which was very limited in scope—raises significant 

questions about its applicability to beneficiary complaints. It was labor-intensive, 

involving considerable outreach and education to all parties. In the end, 28 of 58 

beneficiaries accepted the PROs’ offer of mediation, and of these, only 11 providers agreed 

to mediate as well. Bringing together a beneficiary and provider or practitioner can present 

a burden to both parties, particularly a frail beneficiary. Furthermore, there is likely to be a 

perceived imbalance of power between the participants. The pilot’s experience in reaching 

resolutions between the parties was poor: just 3 of the 11 mediation cases ended up 

resolving their concerns to the beneficiaries’ satisfaction. 

The evaluation of the mediation pilot recommended that mediation be tested on a larger 

scale before implementation.33 Among the unanswered questions left by the pilot are: 

What types of complaints are appropriate/inappropriate for mediation? Should the severity 

of harm be considered? What role would medical record review have in mediation? To 

what extent is mediation a burden to complainants who may be elderly or frail? How does 

mediation serve as a beneficiary protection if there is no intervention or follow-up? Do the 

The Medicare Complaint Process: A Rusty Safety Valve 10 OEI-01-00-00060 
benefits of mediation justify the resources spent on training PRO staff and educating 

providers and beneficiaries? 

Quality Improvement Orientation 

An effective complaint process guides quality improvement. 

Quality improvement projects rarely stem from complaints. Complaints have 

been a poor source of information on which to base quality improvement projects, which 

are the focus of the PROs’ contracts with CMS.34 The difficulties in identifying a pattern 

of complaints coupled with the PROs’ current contracts, which stress national quality 

improvement projects as opposed to local projects, make complaints an unlikely source for 

such projects. Even under their last contract, under which local projects played a larger 

role, just 1 of 50 PROs reported implementing a quality improvement project based on 

beneficiary complaints.35 

Responsiveness 

An effective complaint process provides regular, clear, and substantive responses to 

complainants. 

Limited responses. We found that beneficiaries generally received correspondence 

from the PRO twice: once at the beginning of the complaint process when the PRO 

acknowledges the complaint and explains the process, and again at the close of the review 

when the PRO sends a final letter(s). In our review of 82 complaints at 3 PROs, we found 

minimal documentation of ongoing written communication between PROs and 

beneficiaries during the review process, even though the PRO manual instructs PROs to 

“recontact the complainant whenever you experience any delays with your review and 

provide the reason for the delay.”36 We did, in fact, find delays in the review process to be 

common. In some cases, however, we did see evidence of beneficiaries calling and 

discussing their complaints with the PROs during the review process. 

Consent for disclosure remains problematic. Current procedures require PROs to 

obtain consent from the physicians who provide the care in question before the PROs can 

share their review results with beneficiaries (however, on July 9, 2001, a Federal district 

court judge found that these procedures are contrary to Federal law).37 Without that 

consent, PROs can respond to beneficiaries’ complaints only in the most general way. But 

PROs have a difficult time obtaining physician consent, particularly when the medical 

record review identifies quality-of-care issues. PROs obtain consent in just 21 percent of 

complaints where a quality-of-care concern is confirmed. They obtain consent twice as 

often—42 percent—when no concern is confirmed.38 Because complaints often involve 

The Medicare Complaint Process: A Rusty Safety Valve 11 OEI-01-00-00060 
multiple care settings and physicians, obtaining consent can be complex if only some 

physicians consent. As a result of this consent requirement for complaints with several 

concerns, we also found that beneficiaries commonly receive multiple final response letters 

from the PRO, each letter dealing with a single aspect of the complaint. In one case, a 

beneficiary received eight final response letters from the PRO, all on the same day. 

Vague language. Our previous study defined a substantive response as including three 

components: (1) what the PRO did to investigate the complaint, (2) what the review 

revealed, including whether a quality-of-care problem was confirmed and, if so, the nature 

of the problem, and (3) if a quality-of-care problem was confirmed, what action the PRO 

took based on it.39 Overall, not all 

PROs are meeting all three 

components. We reviewed over 

100 final letters to beneficiaries 

from the PROs responding to our 

survey and found PROs vary 

widely in the type and quality of 

information they provide 

beneficiaries. We often found the 

letters to lack plain language and 

even include intimidating 

references to statutes and 

regulations (see box). 

Actual Language from Final

PRO Response to a Complainant 

“THE FOLLOWING STATEMENT IS REQUIRED 

TO PROTECT CONFIDENTIALITY. . . 

UNAUTHORIZED DISCLOSURE OF PRO 

CONFIDENTIAL INFORMATION MAY RESULT 

IN A $1000 FINE AND/OR 6 MONTHS 

IMPRISONMENT IN A FEDERAL 

PENITENTIARY.” 

All letters did explain that PROs investigate complaints through medical record 

review—information also spelled out in PROs’ initial letters acknowledging the receipt of 

the complaint. However, 24 percent of the final letters excluded a summary of the original 

complaint. We also found the responses to fall short of describing what the review 

revealed. Even when PROs received consent, some used language so vague that we had 

difficulty determining the nature of the problem.40 Likewise, the PROs used vague 

language in describing their follow-up of confirmed problems, offering explanations such 

as “appropriate action has been or is in the process of being taken to prevent problems of 

this type from occurring in the future.”41 

CMS does provide PROs with a manual to guide and standardize how they operate, 

including sample letters to complainants. Despite specific instructions for PROs not to use 

the samples as form letters, many PROs do just that, without providing any case specific 

details. Through our survey and site visits, many PRO officials reported finding the 

manual to be both confusing and of limited usefulness.42 

Beneficiaries frustrated. PROs reported, both through our survey and site visits, that 

beneficiaries are often unsatisfied after the PRO completes its review and want closure 

after months of waiting. They want to know what specific actions the PRO took in 

response to their particular complaints. 

The Medicare Complaint Process: A Rusty Safety Valve 12 OEI-01-00-00060 
Timeliness 

Each step in an effective complaint process is completed within an established, 

reasonable time frame, and mechanisms exist to deal with emergent complaints in 

an expedited manner. 

Established time frames difficult to achieve. PROs continue to face difficulties in 

meeting CMS’ prescribed time frames for completing their reviews of beneficiary 

complaints. Since our 1995 inquiry, CMS shortened the target time frames considerably, 

from 220 to 150 days.43 Despite the reduced time frames from CMS, 43 of 55 complaints 

we reviewed that had complete date information exceeded the allowed time frames for 

review.44 

PRO officials identified a few major obstacles that prevent a more timely process. 

Collecting medical records from multiple care settings can cause delays, particularly when 

one of the settings is unaccustomed to working with the PRO. Unlike hospitals, settings 

such as physician offices and home health agencies have had less interaction with PROs, 

which means PROs may need to educate them to get records. Some PRO officials noted 

that their lack of authority to deny payments in certain settings can affect how responsive 

those places are in sending medical records. 

In recent pilots, a few PROs experimented with revised approaches to the complaint 

process, such as using a case manager to manage communications with the provider or 

beneficiary. The pilot evaluation found this approach to be more timely. 

Public Accountability 

An effective complaint process makes complaint information available to the public. 

Little information available. Neither CMS nor the PROs make much complaint 

information available to Medicare beneficiaries and other interested parties, such as 

advocates. CMS does not release any aggregate national data on complaints. In fact, 

CMS’ own data system does not directly count actual complaints, though that number can 

be deduced through programming.45 The data system does count how many medical 

records were reviewed by PROs due to a complaint. Because one complaint can trigger 

multiple reviews, that number is a poor proxy for how many complaints PROs actually 

receive over a given period. 

Thirty-six out of 51 PROs reported that they release some complaint information, usually 

through their annual reports. The most commonly released piece of information was 

simply the number of complaints received. Fourteen of these PROs reported that they 

The Medicare Complaint Process: A Rusty Safety Valve 13 OEI-01-00-00060 
released information on the types of complaints they received and 15 on the outcome of 

review. 

PROs face two major obstacles to achieving a more effective

beneficiary complaint process. 

CMS’ contracts with PROs treat complaints as a distinctly minor activity. The 

contracts stress quality improvement and payment error reduction. 

CMS’ current contract with the PROs divides their functions into six specific tasks. Half 

of those tasks relate to CMS’ Health 

Care Quality Improvement Program, 

which has been a major focus of the 

PROs over the past 7 years. Those 

tasks include quality improvement 

projects that are national, local, and 

related to Medicare+Choice plans. 

The fourth task concerns CMS’ new 

Payment Error Prevention Program, 

which is designed to protect the 

integrity of the Medicare Trust 

Funds. Together, these tasks 

represent 79 percent of CMS’ 

estimated budget for all tasks in the 

sixth contract period (see box). The 

contract also calls for each PRO to 

have two leadership positions: a 

director for the Health Care Quality 

Improvement Program (tasks 1 

Estimated PRO Budget for the 6th Contract Period, 

by Contract Task 

Task Budget Percent 

(In millions) 

1. National QI Projects $237 36% 

2. Local QI Projects $ 81 12% 

3. Medicare +Choice

QI Projects $ 49 8%

4. Payment Error 

Prevention Program $148 23%

5. Other Contract Activities* $122 18% 

6. Special Projects $ 21 3% 

* Mandatory case review is estimated to cost about $49 

million, which is 7 percent of the total estimated budget. 

Source: OIG Analysis of budget data provided by CMS for 

the 6th scope of work (excludes information services). 

through 3) and a director for the Payment Error Prevention Program (task 4). 

Despite beneficiary protection being identified elsewhere in the contract as one of three 

major functions of the PROs, the complaint process falls under task 5 of the contract, 

labeled “Other Contract Activities.”46 Representing 18 percent of the estimated budget, the 

“Other Contract Activities” section serves as a catch-all. It covers outreach and all 

mandatory review categories, which include complaints as well as hospital-issued notices 

of noncoverage, among others. Mandatory reviews, however, represent just 7 percent of 

the total estimated budget (see box). Unlike the requirements for the Quality Improvement 

and Payment Error Prevention Programs, the contract requires no director assigned to 

beneficiary protection or mandatory case review. 

CMS’ oversight of the PROs reflects the focus of the contract, with the most attention on 

the Health Care Quality Improvement (task 1) and Payment Error Prevention (task 4) 

Programs. The contract includes some performance expectations for those tasks. CMS did 

not publish its evaluation standards for the PROs until April 26, 2001, fully 21 months into 

The Medicare Complaint Process: A Rusty Safety Valve 14 OEI-01-00-00060 
 a contract period expected to last 36 months. Those criteria require little more than for 

CMS, through its regional project officers, to monitor electronically submitted data on the 

medical record reviews conducted by each PRO. Before those criteria were published (for 

the first 21 months of the contracts), CMS’ project officers, located in four regional offices, 

relied on checklists and site visits to monitor the PROs. We spoke with a project officer in 

each region, and while they vary in their approaches, they reported that their focus was on 

quality improvement and payment error prevention. For those that did review the 

beneficiary complaint process, their review was largely administrative and focused on 

documentation. 

PROs tend to be more oriented to the medical community than to the beneficiary 

community. This helps them in conducting quality improvement projects but can 

hinder them in developing a more effective beneficiary complaint process. 

Investigating complaints thoroughly—seeking additional cases for review based on 

complaints and intervening with corrective actions in cases that fall short of the provider or 

practitioner “grossly and flagrantly” violating standards of care—can undermine the PROs’ 

relationships with the medical community.47 The focus of the PROs’ contracts puts a 

premium on those relationships. Without cooperation and support from the physicians and 

providers, the PROs would be hard-pressed to conduct any of their quality improvement 

projects. And given how significantly such projects figure in the PROs’ contracts and 

CMS’ evaluation of the PROs, those relationships become a priority. In fact, PROs are 

inherently tied to the medical community. CMS requires PROs to have the support of 

physicians in their States, which PROs must demonstrate at the start of each new contract. 

Furthermore, while PRO boards must have one consumer representative—defined as a 

Medicare beneficiary—all the other members may be physicians and other health care 

professionals.48 

The PROs’ orientation toward the provider community is not new. In fact, PROs 

traditionally have exhibited a reluctance to take on a more enforcement-oriented role that 

might undermine their relationships with the medical community. They have rarely, for 

example, referred physicians or providers for sanction. PROs have referred just six 

providers or practitioners for sanction in the past 5 years, and none in the past 2 years.49 

They prefer educational approaches, which are more in line with their quality improvement 

efforts, over punitive approaches. This reflects CMS’ view of the PRO program as 

operating in a “penalty-free environment.”50 The orientation toward the provider 

community was reinforced in 1993 with the onset of the Health Care Quality Improvement 

Program and the parallel decline in medical record review requirements. To date, the 

PROs’ preference for educational approaches remains strong, which leaves little room for a 

credible complaint process. 

The Medicare Complaint Process: A Rusty Safety Valve 15 OEI-01-00-00060 
RECOMMENDATION 

This report focuses on the PROs’ complaint process. That process is available in each 

State for Medicare beneficiaries with concerns about the quality of care they receive. 

PROs bring a great deal of expertise to the process given their extensive experience in both 

reviewing medical records and working with beneficiaries. However, we found that the 

complaint process falls short of providing an effective safety valve for beneficiaries—just 

as we did 5 years ago. It has major shortcomings: it is hard-to-use, it rarely holds 

individual providers or practitioners accountable, and its responsiveness to beneficiaries is 

limited, leaving them frustrated and unsatisfied. Fundamentally, the complaint process 

represents a minor activity in a program more concerned with overall quality improvement. 

While fostering improvement represents an important goal, providing beneficiaries with a 

meaningful complaint process also serves an important goal of protecting beneficiaries 

from harm. 

CMS must exert strong leadership to address the shortcomings we identify and provide 

beneficiaries with an effective complaint process. In our draft report, we presented a series 

of recommendations on how CMS could achieve an effective complaint process. In this 

final report, we have revised our recommendations and present CMS with two options on 

how it can achieve an effective complaint process. The recommendations from the draft 

report are fully incorporated under the first option. 

CMS should provide Medicare beneficiaries with an effective

complaint process that meets the eight criteria identified in

our template. 

This is our core recommendation. Our template, which is on page 6, spells out the 

characteristics of an effective complaint process in each of the following eight elements: 

accessibility, investigative capacity, interventions and follow-through, quality 

improvement orientation, responsiveness, timeliness, objectivity, and public accountability. 

CMS has already endorsed these elements in Congressional testimony and in comments on 

a previous OIG report, calling them “essential.”51 

Below we present two options for CMS to consider in achieving an effective complaint 

process for Medicare beneficiaries. The first focuses on fixing the process within the PRO 

program; the second focuses on establishing a complaint process outside of the PRO 

program. Following the two options, we briefly identify some issues that CMS must 

address in pursuing either option. 

The Medicare Complaint Process: A Rusty Safety Valve 16 OEI-01-00-00060 
Option 1: CMS could fix the complaint process within the existing PRO 

program. Toward that end, it must 

Make the complaint process more prominent in the PRO program. Increasing 

the prominence of the complaint process is the first step toward achieving an effective 

beneficiary safety valve. To make a difference, CMS must give the beneficiary complaint 

process more stature in the contract. It must remove the complaint process from the 

category of “Other” and give it its own section. Without the fundamental commitment 

from CMS for those changes, any efforts to improve the complaint process through policy, 

contractual, or regulatory changes will be marginal at best. Indeed, CMS should look 

beyond the PRO program itself for ways to enhance the stature and support of the 

complaint process. CMS could, for example, enhance the 1-800-Medicare telephone 

service by adding a menu option about how to lodge a complaint with the PROs. 

Giving the complaint process more prominence as a beneficiary protection is in line with 

CMS’ own mission, vision, goals, and objectives, as spelled out in its Strategic Plan.52 In 

fact, CMS’ Strategic Plan includes a specific objective aimed at protecting beneficiaries 

from substandard care and identifies an effective complaint mechanism as a strategy for 

achieving that objective. Furthermore, it emphasizes “the themes of 

accountability/stewardship and a renewed focus on the ‘customer’” and “a renewed 

Agency commitment to beneficiaries as the ultimate focus of all CMS activities, 

expenditures, and policies.”53 

Specify its expectations through its contracts with the PROs. CMS should 

expect a basic level of performance from the PROs in each of the eight elements. It should 

articulate those expectations in its contracts. The contracts—as opposed to the PRO 

manual—represent CMS’ best mechanism for articulating those expectations. CMS could 

consult with the PROs and other stakeholders to develop the explicit expectations element 

by element. For example, under the accessibility element, CMS could expect that PRO 

hotlines are easier to find (e.g., by including the numbers in CMS publications and 

requiring better listings in phone books under the yellow pages or blue government pages). 

It should expect that those numbers are also answered appropriately. Under investigative 

capacity, it should clarify its expectations for referral relationships and follow-up with 

entities such as survey and certification agencies. Under responsiveness, it could expect 

the kind of substantive responses we called for in our report 5 years ago (which would also 

reflect the July 9, 2001 findings of a Federal district court judge, who ordered the 

Department to instruct PROs to disclose the results of PRO complaint investigations to 

beneficiaries).54 

Consider different contracting approaches for the complaint process. The 

shortcomings we identify in this report are serious. They undermine the ability of the 

complaint process to function as an effective safety valve. They may be so serious, in fact, 

as to warrant an overhaul of how the PRO program is structured, financed, and managed. 

It may be time to search for some creative solutions. For example, as PRO quality 

improvement projects tend toward more national—as opposed to local—approaches to 

benchmarking, so too, perhaps, could complaint determinations. Below are three 

contracting options CMS could consider. 

The Medicare Complaint Process: A Rusty Safety Valve 17 OEI-01-00-00060 
First of all, CMS could modify the current contract with the PROs. In modifying the 

contract to give the complaint process more prominence, CMS could require each PRO to 

have a leadership position devoted to beneficiary protection, parallel to the directors called 

for in the contract to oversee the Quality Improvement and Payment Error Prevention 

programs. It should specify measurable performance expectations for the complaint 

process. Of the three options, this option would likely offer the most flexibility. But, 

because of the PROs’ existing orientation to providers, it could make achieving a more 

prominent complaint process difficult. 

Second, CMS could consider a separate contract with the PROs. Such a separate contract 

should focus on the whole complaint process, the related outreach activities such as the 

hotline, or some parts of each. Some PROs would likely develop into complaint specialists 

through this approach and compete for complaint contracts in multiple States. This 

approach has the advantage of a contract with a singular mission, but could result in some 

coordination problems within or among PROs. 

Third, CMS could consider a subcontract through the PROs. Like the second option, this 

approach gives the complaint process more prominence by allowing it to be the singular 

mission of the subcontract but shares the same potential problem with coordination. This 

approach would open the field of potential contractors to include any organizations capable 

of delivering the subcontract’s requirements for an effective complaint process. Such 

organizations would compete to win the subcontract, which PROs would manage. 

We recognize that some legislative changes may be necessary to carry out some of these 

strategies.55 

Hold the PROs more accountable for providing an effective complaint 

process. CMS should revise and expand its criteria for evaluating the beneficiary 

complaint process. The current criteria, published in the Federal Register April 26, 2001, 

make no specific mention of that process. In the meantime, though, CMS should find ways 

to hold the PROs accountable for their contractual requirements, including developing 

relevant performance measures and performance incentives. Once again, our template 

could serve as a framework for CMS in defining such measures and incentives. CMS 

could work with the PRO community to develop them. 

Furthermore, CMS should make information publicly available on the numbers, nature, and 

outcomes of complaints investigated by the PROs. It could do this through its website and 

by requiring PROs to include their State-specific information in their own websites and in 

their annual reports. CMS could work with the PRO community to determine the scope of 

such information. 

The Medicare Complaint Process: A Rusty Safety Valve 18 OEI-01-00-00060 
Option 2: CMS could establish a complaint process outside of the PRO 

program. 

This option represents a significant departure from how CMS has handled beneficiary 

complaints to date. It would require legislative change. 

As we have defined it, this option must include a mechanism to deal with complaints about 

facilities as well as individual practitioners. In other words, it must have the same scope as 

the existing PRO program’s complaint authority. It must also have a mechanism to educate 

beneficiaries about how to register their complaints. CMS has some choices in how to 

establish a complaint system outside of the PRO program to achieve that. For example, it 

could establish an entirely new program or contract mechanism focused on complaints and 

reaching out to beneficiaries about their rights to complain. It could create new 

mechanisms to deal separately with complaints and outreach. It could even develop 

alternative mechanisms for mediating certain types of complaints. Or it could build on 

existing entities that conduct similar work. We explore the latter in more detail below. 

State survey and certification agencies already respond to complaints about care provided 

in certain facilities. Indeed, they are often the frontline responders to adverse events and 

complaints. They have agreements with CMS to respond to complaints about certain 

facilities that participate in the Medicare program. These agencies usually have State 

licensure authorities for certain provider types in addition to the authority stemming from 

their agreements with CMS. Currently, CMS’ agreements with State survey and 

certification agencies emphasize nursing homes, home health agencies, and hospitals while 

excluding certain provider types, such as managed care organizations and physician 

offices. If CMS were to look to these agencies under this option, it would have to modify 

its agreements with them to ensure that complaints about all provider types would be 

equally covered. 

Medical licensure boards also already respond to complaints from the general public. 

Unlike State survey agencies, which focus on facilities, licensure boards focus on 

individual practitioners. In general, the mission of these boards is to protect the public by 

ensuring that practitioners have the appropriate skills, knowledge, and conduct to practice 

medicine safely. Responding to complaints about practitioners is a central function of 

these boards, which have the authority to intervene and take action against an individual’s 

license to practice medicine. CMS already requires that practitioners who participate in 

Medicare be appropriately licensed by the medical board in their States of practice. 

Under this option, PROs would no longer be handling complaints, so the job of educating 

beneficiaries must also be placed elsewhere. Educating beneficiaries about their rights to 

complain as well as how to lodge a complaint is critical to ensuring an accessible complaint 

system. Many groups exist that provide support and outreach to Medicare beneficiaries. 

The State Health Insurance Partnership Program, for example, already receives funding 

from CMS to counsel and assist Medicare beneficiaries with health insurance-related 

concerns. This grant program exists in each State. 

The Medicare Complaint Process: A Rusty Safety Valve 19 OEI-01-00-00060 
Finally, just as we called for under the first option, CMS would have to specify its 

expectations for each of the elements in our template, hold the complaint system 

accountable for performance, and make information publicly available on the numbers, 

nature, and outcomes of complaints. How this would unfold would depend on what a 

complaint process outside of the PRO program would encompass. 

Issues for CMS to Consider 

The two options above have advantages and disadvantages for CMS to weigh as it 

considers how to best achieve our core recommendation, which is an effective complaint 

process for beneficiaries. Below we highlight those issues we consider paramount. 

• To what extent would establishing a complaint process outside of the PROs isolate the 

PROs from beneficiaries, who are the centerpiece of CMS’ programs? 

• To what extent would fixing the complaint process within the PRO program exacerbate 

the tension between the quality improvement and complaint responsibilities of the PROs? 

• To what extent does each option require legislative and regulatory changes to ensure that 

the complaint process functions with the appropriate authority and scope? 

• What are the resource implications of each option? 

The entities identified in each option—PROs, State survey and certification agencies, and 

medical licensure boards—all have performance track records in how well they respond to 

complaints. None of those records is without blemish.56 We urge CMS to carefully 

consider these issues, and others it identifies, as it deliberates on how to best achieve an 

effective complaint process for beneficiaries. 

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C O M M E N T S O N T H E 

DRAFT REPORT 

CMS did not provide detailed comments on the recommendations in our draft report. We 

look forward to receiving such comments in response to this final report. We solicited and 

did receive comments from the American Health Quality Association, Citizen Advocacy 

Center, the AARP (formerly the American Association of Retired Persons), and the 

American College of Physicians-American Society of Internal Medicine. Below, we 

summarize their comments. We urge CMS to consider the comments we received. 

Appendix B contains the full text of all the comments. 

The American Health Quality Association 

The American Health Quality Association agreed that CMS and the PROs should do more 

to make the complaint process more well-known and responsive to beneficiaries. To do so, 

the Association called for a reconfiguring of the complaint process and its funding to better 

integrate the principles of quality improvement within it. The Association called for CMS 

to implement a mediation and case management within the complaint process. 

Citizen Advocacy Center 

In its comments, the Citizen Advocacy Center emphasized that PROs are the appropriate 

entities to handle beneficiary complaints because of their unique expertise, access to 

records, and authority. It also emphasized beneficiaries’ rights to be heard and rights to 

redress. The Citizen Advocacy Center noted its support for the PROs’ focus on quality 

improvement and its view that a viable complaint process can be integrated into the quality 

improvement program. It identified further actions for CMS and the PROs to take to 

improve the complaint process. 

AARP 

AARP endorsed our template for an effective complaint process and found our 

recommendations useful. It noted that while it supports the quality improvement focus of 

the PROs, that focus does not preclude a more effective complaint process. It emphasized 

the importance of outreach and that PROs need to enhance their reputations as aggressive 

overseers of quality that value beneficiary input. AARP further recommended that CMS 

consider contract changes that would allow complaint reviews to be conducted by other 

regional PROs, thereby protecting the local quality improvement role. 

American College of Physicians-American Society of Internal Medicine 

Like the other commenters, the American College of Physicians-American Society of 

Internal Medicine agreed that an effective beneficiary complaint process is key to ensuring 

quality of care. It expressed its support for the current quality improvement focus of the 

PROs and emphasized that an improved complaint process can co-exist without 

The Medicare Complaint Process: A Rusty Safety Valve 21 OEI-01-00-00060 
compromising quality improvement. It further recommended that the complaint process be 

improved through making it more accessible and easier to use, including an informal 

complaint resolution process, and specifying more precisely what information a PRO can 

release that balances beneficiaries’ need for responsiveness as well as the trust of the 

medical community. 

The Medicare Complaint Process: A Rusty Safety Valve 22 OEI-01-00-00060 
APPENDIX A 

Profile of Complaints Reviewed 

Below we highlight information abstracted from the complaint files we reviewed at three 

PROs. We looked at 82 complaints in all, 16 of which had no confirmed quality-of-care 

concerns and 66 of which had at least 1 confirmed quality-of-care concern. Overall, we 

found complaints to be complex, ranging in types of concerns and care settings. 

Sources of Complaints. PROs receive complaints from a variety of sources. 

Complainants either mail their written complaint directly to the PROs or allow PRO hotline 

staff to transcribe their complaint over the phone. While most complainants are Medicare 

beneficiaries or their representatives, some complaints are submitted anonymously. Of the 

82 complaints we reviewed, 13 were referrals from other entities. Most of these referred 

complaints came from CMS and Medicare fiscal intermediaries. 

Complaint Types. Complaints can raise a variety of allegations. Of the 82 complaints we 

reviewed, we identified 297 separate concerns that complainants wanted the PROs to 

investigate. On average, each complaint raised 3.6 concerns; one complaint had as many 

as 9 concerns. 

We organized these concerns into four main categories: 

1. Technical quality concerns, which question clinical expertise and decisions, such as 

the appropriate use of medications; 

2. Service quality concerns, which question facility maintenance and solicitude with 

patients, such as facility temperature and the friendliness of staff; 

3. Administrative concerns, which question general medical office management, such 

as errors in billing; 

4. Other concerns, which question issues beyond those of technical quality, service 

quality, and administrative concerns, such as instances of abuse and neglect. 

The table on the next page summarizes the number and percentage of each of those 

complaint types in the cases we reviewed. Overall, more complaints involved technical 

quality concerns than other types. 

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APPENDIX A 

Type of Concern Total Number of 

Concerns 

Percent of Total 

Number of Concerns 

Technical Quality 219 74% 

Service Quality 43 14% 

Administrative 11 4% 

Other 23 8% 

Unknown 1 < % 1

Total 297 100% 

Note: N=82 complaints

Source: OIG analysis of beneficiary complaints from three PROs, 2000.

One complaint can have a mix of these types of concerns, for example: 

C A beneficiary raised a technical quality concern that during his bladder surgery in an 

ambulatory surgical center he suffered complications that were improperly treated. 

The surgical center transferred him by wheelchair to a hospital six blocks away. He 

called this transfer method “a traumatic ordeal” as he was wheeled down the street 

dressed in a hospital gown with his family following him. This transfer method 

involved a service concern. 

C The wife of a Medicare beneficiary raised a quality concern that her husband’s 

rehabilitation center discharged him to a skilled nursing facility still ill with an 

infection. She then questioned the service of the nursing staff who did not give her 

regular updates about her husband’s health, especially about his decrease in appetite. 

C A Medicare+Choice beneficiary complained that he had used all of his lifetime 

inpatient mental health benefits because physicians in a hospital’s alcohol and drug 

detoxification unit, psychiatric unit, and emergency room improperly admitted and 

treated him. This complaint raised not only administrative concerns that he was 

incorrectly billed for the care he received, but also technical quality concerns that he 

received unnecessary and harmful care. 

Care Setting. Complaints can also raise concerns about care given in multiple health 

care settings, such as hospitals, skilled nursing homes, emergency rooms, and physician 

offices, among others. From the 82 complaints we reviewed, 25 complaints concerned 

care given in 2 or more care settings. Five of these 25 complaints involved 3 care settings. 

The Medicare Complaint Process: A Rusty Safety Valve 24 OEI-01-00-00060 
APPENDIX A 

The table below summarizes the number of complaints that involved each care setting. 

Some complaints involved more than one care setting. Most complaints involved 

hospitals, but skilled nursing facilities and emergency rooms made up a significant 

number as well. 

Care Setting Number 

Acute Care Hospital 44 

Skilled Nursing Facility 22 

Emergency Room 20 

Physician Office 16 

Home Health Agency 2 

Rehabilitation Center 2 

Ambulatory Surgical Center 1 

Psychiatric Unit in Acute Care 

Hospital 

1 

Free-Standing Psychiatric 

Hospital 

1 

Physical Therapy 1 

Radiological Center 1 

Hospice 1 

Outpatient Care Facility 1 

Note: N=82 complaints

Source: OIG analysis of beneficiary complaints from three PROs, 2000.

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APPENDIX B 

Detailed Comments on the Draft Report 

In this appendix we present the full text of the comments we received in response to our 

draft report. They include: 

C Centers for Medicare and Medicaid Services (formerly the Health Care Financing 

Administration) 

C American Health Quality Association 

C Citizen Advocacy Center 

C AARP (formerly the American Association of Retired Persons) 

C American College of Physicians-American Society of Internal Medicine 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX B 

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APPENDIX C 

Endnotes 

1. Omnibus Budget Reconciliation Act of 1986, Pub. L. No. 99-509. 

2. 42 U.S.C. sec 1320c-3 (a) (14). 

3. U.S. Department of Health and Human Services, Office of Inspector General, The Beneficiary 

Complaint Process of Medicare Peer Review Organizations, OEI-01-93-00250, November 1995. 

4. Health Care Financing Administration, Peer Review Organization Manual, 5020: 5-11 

through 5-12 and Exhibit 5-17 through Exhibit 5-18. 

5. The California PRO, California Medical Review Incorporated (CMRI), in collaboration with 

the University of California at San Francisco, RAND Corporation, and Center for Social 

Redesign, The Medicare Beneficiary Complaint Alternative Methods Study, 500-96-P535, 

Modification P00014, October 1999. 

6. 66 Fed. Reg. 93, 25389, May 14, 2001. 

7. The PROs’ fifth contract period began April 1996. The sixth contract period began in August 

1999 and is expected to last for 3 years. 

8. We excluded the PROs for Puerto Rico, American Samoa, Guam, and the Virgin Islands from 

this survey. 

9. We asked for final response letters where: (1) no quality-of-care concern was identified, (2) a 

quality-of-care concern was confirmed, and the practitioner consented to disclosure, and (3) a 

quality-of-care concern was confirmed, and the practitioner declined to disclosure. 

10. Health Care Financing Administration, The Successful PRO in 5 Years, Baltimore, MD, 

November 8, 1994. 

11. Sixth Scope of Work, R.F.P. No. CMS-99-001/ELH, March 1, 1999, p. 13. 

12. The Beneficiary Complaint Process of the Medicare Peer Review Organizations, 3. 

13. U.S. Department of Health and Human Services, Office of Inspector General, The External 

Review of Hospital Quality: A Call for Greater Accountability, OEI-01-97-00050, July 1999. 

14. For further discussion see: Mark R. Yessian, “State Medical Boards and Quality Assurance,” 

Federation Bulletin: The Journal of Medical Licensure and Discipline 79 (1992) 5: 126-135; 

“How Can State Medical Boards Compete in the Quality Assurance Marketplace?,” Federation 

Bulletin: The Journal of Medical Licensure and Discipline (1994) 2: 102-108;, “From SelfRegulation to Public Protection: Medical Licensure Authorities in an Age of Rising 

Consumerism, Federation Bulletin: The Journal of Medical Licensure and Discipline 81 (1994) 

3: 190-194. 

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APPENDIX C 

See also: Timothy S. Jost, “Oversight of the Competence of Healthcare Professionals,: in 

Regulation of the Healthcare Professions, Timothy S. Jost, ed. (Chicago, IL: Health 

Administration Press, 1997); L. J. Finnocchio et al., Strengthening Consumer Protection: 

Priorities for Health Care Workforce Regulation (San Francisco, CA: Pew Health Professions 

Commission, 1998); and Carl F. Ameringer, State Medical Boards and the Politics of Public 

Protection (Baltimore, MD: The Johns Hopkins University Press, 1999). 

15. James T. O’Reilly, “Elders, Surgeons, Regulators, Jurors: Are Medical Experimentations’ 

Mistakes Too Easily Buried?” Loyola University Chicago Law Journal 31 (Spring 2000) 3: 355. 

16. U.S. Department of Health and Human Services, Office of Inspector General, The External 

Review of Dialysis Facilities: A Call for Greater Accountability, OEI-01-99-00050, June 2000. 

17. Medicare End Stage Renal Disease Program before the Senate Special Committee on Aging, 

106 Cong., 1st Sess. (June 26, 2000) (statement of Jeffrey Kang, Director, OCSQ). 

18. In 1999, 67 percent of beneficiaries who sought Medicare information from Medicare 

sources reported that the information they received answered their questions. See Health Care 

Financing Administration, FY 2000 Annual Performance Plan, Baltimore, MD, January 2000: 

150. 

19. In 1995, we found that 77 percent of Medicare beneficiaries were unaware of the PROs. 

Our current study revealed no evidence of increased awareness, a conclusion also reached by 

stakeholders with whom we spoke. 

20. Sixth Scope of Work, R.F.P. No. HCFA-99-001/ELH, March 1, 1999: 13. 

21. CMS’ method of tracking data from the PROs, the Standard Data Processing System (SDPS) 

indirectly counts the number of complaints each PRO receives. It counts how many medical 

records the PROs reviewed in response to complaints. One complaint can involve multiple 

settings of care, thus multiple records. Based on SDPS data reported by the PROs for the period 

between August 1997 and July 1999, we arrayed the PROs by the level of outreach activity and 

numbers of records reviewed due to complaints. Just 3 PROs appeared in the top 10 on both 

lists. 

22. PROs averaged less than 2 outreach activities per 10,000 beneficiaries between August 1997 

and July 1999. 

23. CMS lists “Increasing the Effectiveness of Dissemination of Medicare Information to 

Beneficiaries” as a target in its FY 2000 Annual Performance Plan. See Health Care Financing 

Administration, FY 2000 Annual Performance Plan, Baltimore, MD, January 2000: 150. 

24. The two PROs that reportedly did not refer service-related complaints handled them slightly 

differently. In one case, the PRO routinely reviewed the medical record for service complaints. 

As an example, the official from that PRO noted that a beneficiary might complain about her 

water pitcher being out of reach, which is a service quality issue. The medical record could, in 

fact, document that beneficiary’s intake and output and potential dehydration related to an outThe Medicare Complaint Process: A Rusty Safety Valve 50 OEI-01-00-00060 
APPENDIX C 

of-reach water pitcher. The official from the other PRO noted that she considered service 

complaints as potentially the “tip of the iceberg,” and would generally at least “skim the medical 

record.” 

25. CMS’ recent pilot testing of alternative methods for handling beneficiary complaints 

included a recommendation for structured, in-depth telephone interviews of beneficiaries. See 

The Medicare Beneficiary Complaint Alternative Methods Study. 

26. We found a similar pattern when we examined the PROs’ responses to quality-of-care 

problems they identified through medical record review several years ago. In that study, we 

found the PROs’ most common response to providers and practitioners responsible for quality 

of-care problems to be letters, also considered to be educational. (Office of Inspector General, 

Educating Physicians Responsible for Poor Medical Care: A Review of the Peer Review 

Organizations’ Efforts, OEI-01-89-00020, February 1992.) 

27. There are exceptions, of course. At one PRO, the medical director told us about a surgeon 

whom the PRO had referred for sanction many years ago and who was just returning to the 

Medicare program. She told us that the PRO will monitor the quality of care given by the 

surgeon by pulling records for review. 

28. The lack of referrals between PROs and State medical boards has been well documented. 

See Office of Inspector General, Peer Review Organizations and State Medical Boards: A Vital 

Link, OEI-01-91-00530, April 1993 and Citizen Advocacy Center, Information Exchange 

Between Peer Review Organizations and Medical Licensing Boards: Report on 50 State Survey, 

November 1992. 

29. We found PRO referrals to State survey and certification agencies to be more common 

earlier in the complaint process. For example, PROs will refer complaints to such agencies when 

they deem the complaint to be about the quality of services rather than the quality of care. In 

those cases, the PRO would generally not conduct any kind of medical record review at all. 

30. This applies unless they identify a gross and flagrant problem. 

31. Sixth Scope of Work, R.F.P. No. HCFA-99-001/ELH, March 1, 1999: 32. 

32. The Medicare Beneficiary Complaint Alternative Methods Study. 

33. The small number of mediated beneficiary complaints and the inconsistent criteria for 

including beneficiaries in the mediation pilot limit the conclusions that can be drawn from the 

study. The study focused on 58 complaints, of which only 11 involved a provider and 

complainant who both agreed to mediate. Also, each of the five PROs used different criteria to 

select complaints for mediation. Inconsistency across PROs regarding whether to limit 

participation in mediation only to those cases where a medical record review had already been 

completed raises the question of whether mediation is intended to supplement or replace medical 

record review. Although a few complainants were satisfied with mediation, unless all complaints 

also undergo a medical record review, participants in mediation cannot be assured the same 

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APPENDIX C 

protection as those whose complaints undergo medical record review. 

34. CMS estimates that 51 percent of the PROs’ budgets in the sixth contract will be devoted to 

quality improvement activities through either national projects (33 percent), local projects (11 

percent), and managed care projects (7 percent). See Sixth Scope of Work, R.F.P. No. HCFA99-001/ELH, March 1, 1999. 

35. This quality improvement project concerned advanced directives. 

36. Health Care Financing Administration, Peer Review Organization Manual, 5020(A)(1). 

37. For current procedures, see Peer Review Organization Manual section 5035 and 42 C.F.R. 

476. For the recent court decision, see Public Citizen, Inc. v. Department of Health and Human 

Services, et al., Civil Action No. 00-00731, July 9, 2001. 

38. Based on Office of Inspector General review of SDPS data from August 1997 through July 

1999. 

39. The Beneficiary Complaint Process of the Medicare Peer Review Organizations. 

40. One PRO routinely provided a chronology of the care provided to the beneficiary during the 

time in question. While this conveyed that the PRO had indeed reviewed the case carefully, it 

also could suggest that the chronology represented the results of the medical record review. 

41. This is from a sample of final response letters with confirmed problems and consent for 

disclosure. 

42. In fact, after receiving questions from CMS regional office staff in May, CMS completely 

reversed its interpretation of the need for beneficiary consent to disclosure. Previously, if 

beneficiaries declined to have their names disclosed in the review process, CMS instructed the 

PROs to provide no final response whatsoever. Now, CMS allows a final response—which is 

required by the complaint statute—even where the beneficiary fails to consent to disclosure. (See 

Health Care Financing Administration, Disclosure of Complainant’s Name in Beneficiary 

Complaint, OCSQ TOPS Control Number 2000-13, May 17, 2000.) 

43. This applies for complaints with confirmed concerns and no request for re-review. Health 

Care Financing Administration, Peer Review Organization Manual, exhibit 5-19. 

44. The 55 complaints included 16 without confirmed concerns, 20 with confirmed concerns but 

no re-review, and 19 with confirmed concerns and re-review. We used the timeframes 

appropriate to each category in measuring timeliness. Ten of the 16 complaints without 

confirmed concerns exceeded the 120 allowed days; 16 of the 20 confirmed concerns without rereview exceeded the 150 allowed days, and; 17 of the 19 confirmed concerns with re-review 

exceeded the 165 allowed days. 

45. According to CMS, the SDPS data system can produce the number of actual complaints if 

someone programs it to count those records with the same beneficiary identifier and the same 

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APPENDIX C 

start date as single complaints. 

46. Sixth Scope of Work, R.F.P. No. HCFA-99-001/ELH, March 1, 1999: 32. 

47. 42 U.S.C., sec. 1320c-5 (b) (1). 

48. 42 U.S.C., sec. 1320c-1 (3). 

49. Since 1986, PROs have referred 286 physicians and providers to the Office of Inspector 

General for sanction. PROs made no referrals for FY 1999 or FY 2000. See also Office of 

Inspector General, The Sanction Referral Authority of Peer Review Organizations, OEI-01-92-

00250, April 1993. 

50. Comments from the CMS Administrator in Office of Inspector General, The External 

Review of Hospital Quality: A Call for Greater Accountability, OEI-01-97-00050, July 1999. 

51. See The External Review of Dialysis Facilities: A Call for Greater Accountability and 

Medicare End Stage Renal Disease Program before the Senate Special Committee on Aging, 106 

Cong., 1st Sess. (June 26, 2000) (statement of Jeffrey Kang, Director, OCSQ). 

52. Health Care Financing Administration, Strategic Plan (September 1998). 

53. Strategic Plan, 7. 

54. In that 1995 report, we defined a substantive response as including three elements: (1) what 

the PRO did to investigate the complaint, (2) what the investigation revealed, including whether 

a quality-of-care concern was confirmed, and if so, the nature of the concern, and (3) if a qualityof-care concern was confirmed, what action the PRO took based on it. See The Beneficiary 

Complaint Process of the Medicare Peer Review Organizations. For details on the Federal 

district court decision, see Public Citizen, Inc. v. Department of Health and Human Services, et 

al., Civil Action No. 00-00731, July 9, 2001. 

55. The Social Security Act calls for the Secretary to contract with a single PRO in each State 

(42 U.S.C. 1320c-2). Furthermore, it requires PROs to be the entities making final 

determinations on quality (42 U.S.C. 1320c-3). 

56. See the discussion on page 5 as well as The Beneficiary Complaint Process of Medicare 

Peer Review Organizations, November 1995; Office of Inspector General, Department of Health 

and Human Services, The External Review of Hospital Quality: A Call for Greater 

Accountability and The External Review of Hospital Quality: Medicare Certification, both July 

1999. 

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