Department of Health and Human Servces


OFFICE OF


INSPECTOR GENERA


STATE EVALUATION OF MEDICAID


MANDATORY SECOND SURGICAL


OPINION PROGRAMS


Richard P. Kusserow


INSPECfOR GENERA


OEI-03-89-01530 
EXECUTIVE SUMMAR Y


PUROSE 

Ths report provides inormation on recent State evaluations of Medicaid mandatory 

Second Surgical Opinion Programs (SSOPs) and their implications for the Health Care 

Financing Admstration s (HCF A) proposed reguation requing such program. 

companion report sumaries common elements of States' mandatory SSOPs (OEI03-89-01531 ). 

BACKGROUN 

Section 1902(a)(30)(A) of the Social Securty Act requies that Medicaid State plans 

contain safeguards against unnecessary utiltion of servces and assure that payments 

are consistent with effciency, economy, and quality care. 

States curently use second surgical opinion programs (SSOPs) as a utiliztion 

safeguard. These programs requie clients to obtai independent medical opinons 

prior to elective surgery. The SSOPs encourage patients to be more informed and 

involved in their medical treatment. It is believed that this education enables patients 

to make better decisions and thus lead to improved care and cost savings from 

foregone surgeries. 

SSOPs in th Medaid Prgrm 

The earliest Medicaid mandatory SSOPs were established in 1976. In 1983, the Offce 

of Inspector General (OIG) advised HCFA to establish mandatory SSOPs for 

Medicaid and Medicare. The OIG estiated HCFA could save $157 mion anually 

by adopting mandatory SSOPs for both programs. The HCF A rejected the OIG' 

recommendation, caling for further analysis. 

In 1986, HCFA proposed a reguation requig a mandatory SSOP in each State 

Medicaid program. The proposed reguation would permt a State not to implement a 

mandatory SSOP if its curent review program achieved the objectives of being cost 

effective and preventing unecessary surgery. In 199, HCF A tentatively decided not 

to implement the proposed reguation. At that time, 14 State Medicaid programs 

were using mandatory SSOPS. 

As par of the Omnbus Budget Reconcilation Act of 1990 (OBRA 90), HCFA must 

complete by January 1, 1993, a report to Congress on States' utiliztion review systems 

for certain Medicaid servces. Section 4755(b)(2) of OBRA requies the report to 

address the effects of such servces on patient access to necessary care, quality of care 

and cost of care. 
MEODOLOY 

Durig 1990 we gathered inormation from all 50 States and the District of Columbia 

to determe whether they had mandatory SSOPs or a precertifcation review 

program. We obtaied detailed information from the 14 States with mandatory 

SSOPs, includig site visits to 4 States (Colorado, Masachusetts, Michigan . and Pennsylvania). 

FIINGS 

Cuent SSOP evaluative data is lited and inconclusive. 

Al but two States have review programs other than mandatory SSOPs. Most 

use precertifcation review.


Current data is insufcient to support mandatig SSOPs. 

RECOMMATION 

We support HCFA's intention to withdraw the proposed reguation mandating SSOPs in the Medicad program. 

We recommend that HCFA, upon completion of its report to Congress, assess what additional information is necessary to determine if States are successfuly 

against unecessary utiltion. guardig 

HCFA COMM AN OIG REPONSE 

The HCF A agreed with our recommendation to withdraw the proposed reguation 

mandating SSOPs in the Medicaid program. However, they did not agree to requie States to submit utition data and analysis which would permit HCF A to evaluate the effectiveness of the varous approaches, at least until January 1, 1993, when a report analyzg State utition review is due to Congress. 

Whe we agree that it is not necessary for States to submit data until the report is 

submitted to Congress, we continue to believe in the appropriateness of determg the effectiveness of States' utiltion review programs. We have modified our recommendation to take the report to Congress into account. 

The fu text of comments from HCFA are included in Appendi B. 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . .. . . .. 

TABLE OF CONTENTS


EXCU SUMY


INODUCfON . 

FIINGS 

Cuent Evauatie Data . . . . . . 5 

Oter State Revew Progr .. 7 

Efec on Propoed Reguation. . . . . . 

RECOMMATION. . 

APPENIX States with Madatory SSOPs in 199 . . . . . . . . . . . . . . . . . . .. AAPPENIX B: Comments from the Heath Cae Finci Administrtion B-1 
INTRODUCTION


PURE 

Ths report provides inormation on recent State evaluations of Medicaid mandatory 

Second Surgical Opinion Programs (SSOPs) and their implications for the Health Care 

Financing Admstration s (HCF A) proposed reguation requig such program. 

companion report sumaries common elements of States' mandatory SSOPs (OEI03-89-01531 ). 

BACKGROUN 

Section 1902(a)(30)(A) of the Social Securty Act requies that Medicaid State plans 

contain safeguards against unnecessary utiltion of care and servces and assure that 

payments are consistent with effciency, economy, and quality care. 

States currently use SSOPs as a utiltion safeguard. These programs requie clients 

to obtain independent medical opinons prior to elective surgery. A second opinon 

either confis or refutes the necessity of the proposed surgery. The SSOPs 

encourage patients to be more informed and involved in their medical treatment. It is 

thought that this education wi enable patients to make better decisions which 

lead to improved quality of care and cost savigs from foregone surgeries. 

Ini SSOPS 

The fist national SSOP was established in New York in 1972 as a joint venture 

between Cornell-New York University and a Taft-Hartley benefit fud. Dr. Eugene 

McCarthy established and administered the SSOP. 

In 1974, Dr. McCarhy reported a 18.7 percent rate for nonconfing second 

opinons. Ths resulted in program savings of $2.63 for every dollar spent. The report 

generated interest in Congress which was considerig ways to contain Medicaid and 

Medicare costs. 

The earliest Medicaid mandatory SSOP was established in Massachusetts in 1976. 

Michigan also established its SSOP in 1976. 

HCFA Imple Volu sSOP for Medar 

Durg 1976 and 1977, the House of Representatives' Subcommttee on Oversight and 

Investigations of the House Commttee on Interstate and Foreign Commerce (known 

as the Moss Committee) conducted hearigs on unecessary surgery and its effect on 

spiraling health care costs. The Moss Commttee recommended that the then 

Department of Health, Education, and Welfare promptly institute a program of 
independent professional second opinons to conf the need for elective surgery 

underwtten by Medicare and Medicaid. To comply with this request, HCF A 

implemented a national Medicare voluntary SSOP in September 1978. Prior to th 

HCFA had intiated several second opinon demonstration projects in 1977. 

198111982 Abt Evaltin of sSOPs 

Under a HCF A contract, Abt Associates, Inc., evaluated the voluntary Medicae 

demonstration second opinion program and a mandatory Medicaid SSOP in 

Massachusett. The Abt report concluded that only mandatory programs could 

achieve cost savings because of the low participation rate in voluntar SSOPs. The 

report noted substantial savings for the mandatory SSOP in Massachusetts, where the 

SSOP reduced the volume of surgical procedures by 20 percent, thereby savig an 

estimated $1 mion annually. 

Mandatory SSOPs are effective because of a phenomenon known as the sentinel 

effect. The sentinel effect operates by creatig an environment in which physicians 

recommend fewer surgeries because they know their decisions will be reviewed by 

second surgical opinon consultants. However, voluntary SSOPs have not benefitted 

from the sentinel effect because most beneficiaries do not seek a second opinon. 

Ofe of Insctor Gen (DIG) Recomm Manry SSOPs 

In a 1983 report, the OIG advised HCFA to establish a mandatory SSOP for both 

Medicaid and Medicare. At that time, seven States had implemented mandatory 

SSOPs; three of these States claimed substantial savigs. The OIG estimated HCF 

would save $157 milion annualy by adopting a mandatory SSOP for both programs. 

The HCF A rejected the OIG' s recommendation, citing limited experience with 

mandatory SSOPs in the private and public sectors. The HCF A called for fuer 

analysis of existing second opinion programs before proceedig with any proposal to 

establish a mandatory SSOP for either Medicaid or Medicare. 

Manry SSOPS Prpoed by HCFA 

In 1986, HCF A proposed a regulation requirg mandatory SSOPs in State Medicad 

programs. The proposed reguations requied, at a minium, that a mandatory SSOP 

be applied to 10 common elective surgical procedures. The reguation was designed to 

promote mandatory SSOPs nationally. However, HCF A would permt a State not to 

implement a mandatory SSOP if it curently operated a review program that achieved 

the objectives of being cost effective and preventing unecessar surgery. 
Cuen Stl of Regn 

The proposed mandatory SSOP reguation has never been fialied. The 1986 

Omnibus Budget Reconcilation Act (OBRA 86) precludes HCFA from isswng 

reguations in fiai form until 180 days after releasing a report on the matter. 

In June 1989, HCF A reported on high volume and high payment procedures in the 

Medicad population. The report contained inormation on States' SSOPs. It 

contained no recommendations. 

In 1990, HCF A made a tentative decision not to fial the proposed mandatory 

SSOP reguation. At that time, 14 State Medicaid programs were using mandatory 

SSOPs. 

As part of the Omnibus Budget Reconcilation Act of 1990 (OBRA 90), HCFA must 

complete by January 1, 1993, a report to Congress on States' utilation review systems 

for certain Medicaid servces. Section 4755(b)(2) of OBRA requies the report to 

address the effects of such servces on patient access to necessary care, quality of care 

and cost of cae. 

SSOPs in th Prat Secr 

Cuently, commercial insurers and Blue Cross and Blue Shield plans insurig more 

than 47 mion people do not actively market SSOPs as a stand-alone product. 

They continue to provide it as one component of a complete quality assurance and 

utiltion review package. According to these insurers, the substantial savigs 

documented when SSOPs were first introduced are no longer possible because 

recommendations for elective surgery are usually confed. 

Managed Cae Organitions have also moved away from stand-alone SSOPs. They 

do not market SSOPs as a tool to achieve cost savigs. However, some employers sti 

purchase the program as part of a larger utiltion review package to educate 

employees and enable them to participate more fuy in health care decisions. 

MEODOLOY 

Durig 1990, we gathered information from all 50 States and the District of Columbia. 

We contacted all Medicaid agencies to determe how many curently have mandatory 

SSOPs or have considered one in the past. We also asked if they were using a 

preadmssion, pre certification, or prior approval program. 

We contacted the 14 States with mandatory SSOPs and requested detailed 

inormation. We visited Colorado, Massachusett, Michigan, and Pennsylvania to learn 

fist-hand about their programs. We conducted structued telephone intervews with 

the remaing States. The information requested included: year established, length of 
the program, program admtrator, objectives, procedures covered, reimbursement 

mechanism, nonconfation rate, and evaluation of the program. 

We reviewed pertinent reports by HCFA's Offce of Research and Demonstrations. 

We also analyzed published report on SSOPs in private sector literature. 
FINDINGS


CU SSOP EVALUATI DATA IS LI AN INCONCLUSIVE 

Few Sta hae evaluated th mary SSOPs an evaluati wer 

Thee States (Michigan, Wisconsin, and Colorado) evaluated their SSOPs in 199. 

Eleven States have not evaluated their SSOPs withi the last 2 years. Foureen States 

had mandatory SSOPs in calendar year 1990. (See Appendi A for a list of these 

States. ) 

The Michigan and Colorado evaluations were lited in scope while Wisconsin' 

evaluation was much broader and is ongoing. 

Michiga. The Michigan Medicaid agency used data on the total number of requests 

for second opinon, the total number of second opinions given, the total number of 

surgeries confed, the total number of surgeries not confied, and the total 

number of surgeries actually performed. The evaluation also included inormation on 

the costs of the second opinon program and the hospital admssion and utiltion 

program. Additionally, a routine retrospective review was performed, under the 

hospital admssion and utilition program, on a limted number of actual surgeries. 

Colorado. The Foundation for Medical Care, a provider of medical review for both 

Medicare and Medicaid, evaluated data for two surgical procedures. The Foundation 

compared Medicaid utiltion rates with a non-Medicaid group which had simar 

demographics. 

Wisconsin. The University of Wisconsin-Madison, Center for Health Systems 

Research and Analysis, Medicaid Evaluation Program, is under contract to perform an 

evaluation of the State mandatory SSOP. The evaluation is focused on two program 

outcomes: the estimated change in the number of surgeries performed as a result of 

the program and the resultant cost implications. Using fiscal year 1987-88 data for 

two procedures, researchers compared for selected individuals, the medical cost per 

cae for those electing surgery with those decidig to forego surgery. They estimated 

the number of individuals that would forego surgery as a result of the program. 

addition, the Medicaid Evaluation Program compared program savigs to program 

costs, includig admistrative and second opinion consultation costs. The remaig 

eight procedures are scheduled to be reviewed in a similar manner. 

A recent HCF A study reported that few States had evaluated their SSOPs for cost 

savigs. The 1989 mandated HCFA report to Congress, entitled High Volume and 

High Payment Procedures in the Medicaid Population provided detailed information on 

11 of the 13 mandatory Medicaid programs in operation at that time. (Two of the 

States did not provide information.

The report lited only three States -- Oregon, Virgia, and Washigton -- that 

calculated the savigs they believed accrued to their program as a result of the 

mandatory SSOP. The State evaluations were performed in 1987 or earlier. Oregon 

reported savigs of $394 982 for the period July 1, 1986 to June 30, 1987; Virgi 

reported savigs of $961 521 for caendar year 1986; and Washigton reported savigs 

of $656 00 for the period January 1, 1982 to December 31, 1982. 

Reen evaluati re ar inons

Cuent evaluations reveal that SSOPs are not producing consistent results. Ths is in 

contrast to the earlier evaluations that demonstrated that mandatory SSOPs were cost 

effective and were reducing unecessary surgeries. 

Michigan discontinued its ll-year-old SSOP in 1990. They provided us with a number 

of reasons for discontiuing their program. 

Firt, half of the clients receiving a nonconfg second opinion had the 

surgery anyway. (Michigan s program allowed clients to decide whether to have 

surgery, even if they received nonconfg second opinions. 

Send, about three percent of the surgeries reviewed under the hospita 

admssion and utiliation program were found to be medically unnecessar. 

Thd, foldig the mandatory SSOP into the hospital admssion and utiltion 

review program would reduce provider and recipient confusion and be just as 

effective at holdig down the incidence of elective surgeries. In fact, their 

analysis indicated that Medicaid would save $60 00 by folding the mandatory 

SSOP into the hospital admission and utiltion review program. 

They also felt that the hospital admission would enable the State to keep 

abreast of the latest treatment alternatives and review criteria for elective 

surgeries. Rather than relyig on individual physicians, the State would asume 

the job of ensurig that the most curent treatment alternatives and criteria are 

used. 

Four physician practice patterns had changed since implementation of the 

SSOP. It was thought that the drop in the incidence of elective surgeries is 

party attributable to the fact that the physician communty is much more used 

to the whole concept of utiliztion and peer review. Michigan concluded that 

whie a second opinion was an appropriate and effective response 11 years ago 

it is not today. 

Colorado s evaluation found the program worthwhie. The rate per 100 nonMedicaid members for the two surgical procedures reviewed was lower for the 

populations havig the second opinion program. The rate was even lower per 100 

Medicaid members under the second opinon program. 
Wisconsin s SSOP is curently being evaluated, 1 and thus far, two procedures have 

been reviewed. The evaluation indicates the SSOP is meeting the stated objectie of 

reducing the number of surgeries performed. Medicaid expenditures have been 

reduced as a result of individuals electing to forego surgery after having the second 

opinion. However, only one of the procedures had a favorable savings-to-cost ratio. 

Ths is in contrast to the fist evaluation in 1981 which documented cost saVings and 

the second evaluation in 1985 which documented a break-even point. 

AI Bur TWO STATE HAVE REVIW PROGRA OTH

MAATORY SSOP. MOST USE PRECETICATION REVIW. 

Most States have chosen review programs other than mandatory SSOPs. Of the States 

without a mandatory SSOP, 34 States and the District of Columbia use a 

precertifcation or preadmssion review process to avoid unnecessary surgeries and 

hospital admsions. The pre certifcation process requies that the State s review agent 

be informed prior to treatment as a condition for fu benefit coverage. A 

determnation is then made as to the appropriateness of treatment and proposed site 

of servce. 

Of the 34 States with precertifcation programs, 22 considered a mandatory SSOP. 

However, 14 of the 22 have no plans for implementation. Only 2 of the 22 have 

future plans for implementation. Five did not know and one had already discontiued 

its second opinon program. Almost half of those that had no future plans for 

implementation concluded that a SSOP was not cost effective. Some indicated that a 

SSOP would not save them money or that it had become an obsolete cost contaent 

tool. 

Only two States (Oklahoma and South Dakota) have neither a mandatory SSOP nor a 

pre certifcation or preadmssion review process.

CU DATA IS INSUFCI TO SUPPORT MAATIG SSOPS. 

The proposed HCF A reguation would require State Medicaid plans to include SSOPs 

for certain surgical procedures. Its objectives are cost effectiveness and the prevention 

of unecessa surgery. States using other review programs which HCF A determes 

wi achieve these objectives are not requied to establish SSOPs. 

The proposed reguation would base approval of a State s curent program on whether 

its outcome is, at a mium, equal to the outcome of an SSOP. However, our review 

has demonstrated a lack of outcome data for current SSOPs. This lack of data raises 

doubts as to whether SSOPs should be requied. 

The results of this review were reported in early 1991. 
Additionaly, without data HCF A would be unable to enforce the proposed reguation 

because HCF A would have no performance indicators that could be used to exempt 

States havig an alternative program. Ths is signcant since most States have a 

review program other than a mandatory SSOP. 
RECOMMENDA TION


We support HCFA's intention to withdrw the propo regution madati SSPs 

in the Medcad progr 

We contiue to support HCFA' s effort to ensure that States have methods to 

safeguard against unnecessary utition of care and servces. When the reguation 

was fist proposed in 1986, there was clear evidence of program savigs and 

prevention of unecessary surgery resulting from mandatory SSOPs. At that tie it 

would have been appropriate to require all States to implement a mandatory SSOP. 

However, at this point little evaluatie data is available for mandatory SSOPs. Few 

States have performed evaluations of their exiting mandatory SSOPs. Even when 

evaluations have been done, the results do not conclusively indicate that mandatory 

SSOPs are cost effective and successfu in reducing unnecessary surgeries. Without 

this data, mandatory SSOPs should not be requied. Additionally, HCF A canot use 

mandatory SSOPs as a standard to judge the effectiveness of other review programs if 

data on mandatory SSOPs' effectiveness is inconclusive. 

In order for HCF A to carr out its responsibilties under section 1902, it should assess 

the adequacy of State programs designed to guard against unnecessary utilition. 

There is room for considerable flexibilty and experimentation in the approach to such 

programs. These programs might use SSOPs but could use other methods as well 

such as managed care or pre certifcation review. 

Evaluation of the effcacy of these varous approaches is one goal of HCF A's report to 

Congress on utilation review. Afer completion of its report to Congress, HCF A 

be in a better position to determe what additional inormation, or routine reporting 

of data, is necessary for it to assess State compliance with section 1902(a)(30)(A). 

We therefore recmmend that HCFA, at the completion of its report to Congres as what additional inormation is necto determe if State are succ 

gudig agat unec utition. 
HCFA COMM AN OIG REPONSE


The HCF A agreed with our recommendation to withdraw the proposed reguation 

mandating SSOPs in the Medicaid program. However, they disagreed that they should 

requie States to submit utization data and analysis so they can evaluate the effcacy 

of the various approaches. 

The disagreement is based on the fact that HCF A does not want to requie States to 

submit data at least unti they complete their report to Congress on State utition 

review systems. The report wi include an analysis of State utiltion review 

procedures for ambulatory surgery, preadmssion testing, and same-day surgery in 

order to ensure these programs are appropriate for Medicaid patients. The report 

address the effects of such programs on access, qualty, and costs of care. 

The HCF A has indicated it will ensure that required information on utiltion review 

programs is included in the Medicaid State plans. This could be helpfu if States 

provide enough information to enable HCF A to make determinations on the effcacy 

of various utition review programs. 

We agree that it is not necessary for States to submit utilition data until the requied 

report is submitted to Congress, since the report should provide insights on the impact 

broader data collection requirements wi have on providers and States, as well as the 

HCF A staff. However, we stil believe that it is appropriate to determe the 

effectiveness of States' utilition review programs. We have modified our 

recommendation to take the report to Congress into account. 

The ful text of comments from HCF A are included in Appendi B. 
APPENDIX A


SlATE Wl MAATORY SSPS IN 199


COLORAO 

INIAA


MAYL


MASACHUSETI 

*MICHIGAN 

MINOTA


MISSOURI


NEW JERSEY


OREGON


PENNSYLVANIA


TENNESEE


VIGINIA


WASHINGTON


WISCONSIN


. DISCONTD IN 199

APPENDIX 


COMM FROM TI HETH CAR FIANCIG ADMITION

..

,..\. . ... :.. :.:... .,,. .

Health Care 

",aYtnl, 

DEPARTMENT OF HEALTH &. HUMAN lbRV'CES Financing AdministrDtion 

Memorandum .. J f: DIG-I 

Date WiI
 t7./'J' AIGFrom Acting Admistrator OOJIG 

EXBB Subject rittti Second Suraica O inon 

OIG Draft Re ort - "State Evaluatio

Programs (SSOPs)," OEI-03.89-01530, and "Medicaid Mandatory SSOPs: Sumares of 

State Programs," OEI-03-89-01531 

Inspector General 

Ofce of the Secretary 

dr report We have reviewed the subject companion report. The fit-referenced 

discusses the lack of curent outcome data for mandatory SSOPs and the effect th has 

on the 1986 proposed regulation mandatig SSOPs for Medicad. The secondreferenced report descnoes and summaries the common elements of the 14 States 

Medicaid SSOPs that were in existence in 199. Th latter report was isued as a final 

since it does not contain any recommendations. 

OIG found that 34 States and the District of Columbia use a precertifcation 

preadmission revew process instead of SSOPs to reduce intaces of unecessry 

surgeries and hospital admissions. OIG also found that whie past studies demonstrated 

that mandatory priate sector SSOPs curtiled unecessa surgeries and produced 

savings, the few evaluations avaiable of current Medicaid SSOPs could not conclusively 

determine that these programs were cost-effective or reduced unecessar sureries for 

Medicaid. OIG maintains that the lack of curent outcome data raies doubt as to 

whether SSOPs should be required. Therefore, OIG concludes that the Health Cae 

Financing Administration (HCFA) should withdrw the curent proposed regulation 

which would mandate SSOPs. OIG did, however, recommend tht HCFA ensure tht 

each State establish the requisite utiliztion review program and require States to 

submit such data and analyses to enable HCF A to evaluate the effcacy of the various 

approaches. 

We agree with OlG' s fidings and are currently considerig whether to withdraw the 

regulation mandating SSOPs in Medicaid. However, we disagree with the aspect 

OIG' s recommendation requiring States to submit utization data. Our specific 

coen.u Qn the report s recommendations are attached for your consideration. 

Thank you for the opportunity to review and comment on this drft report. Please 

s recoroendations at your advise us whether you agree with our position on the report 

earliest convenience. 

I ( : .. /7" "J Ov"' 

Attachment .-t' 

!\I 
Comments o Care financin Administration ( 

on the GIG Draft Reports: IIState Evaluation of Medicaid 

ndatory Seconq. SurgicaJ Ooin1on prowams (SSO 

o.Eh03-89-01530, md " id Mandatorv SSOPs: 

Summaries of State progrms." OEI.03-89-01531 

Recommendation 

review program That HCFA should ensure that each State establish the requisite utilzation 

and require States to submit such data and analyses to enable HCF A to evaluate the effcacy 

of the various approaches. 

HCF A Resoonse


HCFA concurs with the first part of this recommendation. We are pleased that OIG 

utiliztion review and we are currently recognizes that there are several viable options for 


considering whether to withdraw the proposed regulation mandating SSOPs. However, we 

disagree with the part of this recommendation that requires States to submit data. 

As noted by OIG in this report, section 1902(a)(30)(A) of the Social Security Act already 

their 

requires States to include safeguards against unnecessary utilzation of medical care in 

State plans. To satisfy this requirement, States are employing several diferent programs, 

including: precertification, preadmission review, coordinated care and SSOPs. We believe 

coordinated care systems represent the best mechanism for reducing hospital costs, admissions 

and lengths of stays prior to surgery. Therefore, while we win continue to encourage States to 

choose coordinated care, we are reluctant to impose new mandates when States are already 

meeting the existing requirement. 

With regard to the second part of this recommendation, we would not want to require that


States submit data at least until HCFA completes its report to Congress on the State


section 4755(b)(2) of the Omnibus Budget utiHzation review systems. This report, required by 


Reconcilation Act of 1990 (OBRA 90), is due to Congress on January 1, 1993. OBRA 90


requires that the repo" include an analysis of State utilzation review procedures for


to ensure these
 ambulatory surgery, preadmission testing, and same-day surgery in order 

programs are appropriate for Medicaid patients. The report will address the effects of such 

programs on access, quality, and costs of care. This study will give us valuable insights on the 

impact broader data collection requirements wil have on providers and States, as well as 

HCF A staff. 

We also believe this requirement may be unnecessarily burdensome given the current austerity States to submit utilzation of many State budgets. While we are not in favor of requiring 

review data at this time, we. will ensure that required information on utilzation review 

programsJs-included in Medicaid State plans.