VA employs approximately 10,000 physicians in its 158 medical centers. To help ensure that the care these physicians provide meets accepted professional standards, VA uses several systems to monitor and evaluate physician practice. These systems include surgical case review, external peer review, credentialing and privileging, malpractice claim analysis, and occurrence screens. An integral part of VA’s process is physician peer review—physicians evaluating the medical care provided by other physicians. Peer review in VA is used by medical centers to determine if practitioner care is less than optimal and is initiated when an occurrence screen identifies potential quality of care problems. Peer review is also used to establish the basis for the granting of privileges to physicians and to examine malpractice claims made against health care professionals in the medical center. No disciplinary action is taken against a physician’s privileges after a peer review following an occurrence screen. This is because quality assurance information, such as occurrence screen peer review data, is confidential and cannot be used in disciplinary proceedings. However, peer review findings can be used by medical center management to initiate a formal investigation of a physician’s performance or conduct after which disciplinary action can be taken. VA guidance, issued in April 1994, presents various methods for conducting peer review but does not mandate a specific peer review technique. Specifically, the guidance discusses the disadvantages of the single reviewer approach and presents three types of multiple reviewer techniques: (1) committee review, (2) multiple independent review, and (3) discussion to consensus. At the six medical centers we visited, two methods of peer review were being utilized: multiple independent review and committee review. (See app. II for a discussion of these approaches.) Regardless of the approach used, the result of any peer review is an evaluation of the care provided by a practitioner and a preliminary determination as to how, in the reviewer’s opinion, other physicians would have handled the case. Cases rated as a level 1 (most experienced, competent practitioners would handle case similarly) usually receive no further action. Cases rated as a level 2 (most experienced, competent practitioners might handle the case differently) or a level 3 (most experienced, competent practitioners would handle the case differently) receive a supervisory review by the responsible clinical service chief, such as the chief of surgery. All physicians and dentists employed by VA are subject to privileging procedures. Privileging is the process by which a practitioner is granted permission by the institution to provide medical or other patient care services within defined limits on the basis of an individual’s clinical competence as determined by peer references. Privileging is done at the time of employment and every 2 years thereafter. However, a physician’s privileges can be examined at any time if a question about his or her performance or competence is raised. The National Practitioner Data Bank was created under Title IV of Public Law 99-660, the Health Care Quality Improvement Act of 1986. The act calls for (1) insurance companies and certain self-insured health care entities to report malpractice payments made for the benefit of a physician, dentist, or other licensed health care practitioner to the Data Bank and (2) hospitals and other authorized health care entities, licensing boards, and professional societies to report professional review actions relating to possible incompetence or improper professional conduct adversely affecting the clinical privileges, licensure, or membership in a professional society of a practitioner for longer than 30 days to the Data Bank. The intent of the act is to improve the quality of medical care by encouraging physicians, dentists, and other health care practitioners to identify and discipline those who engage in unprofessional behavior and to restrict the ability of incompetent physicians, dentists, and other health care practitioners to move from state to state without disclosure or discovery of their previous damaging or incompetent performance. The Data Bank acts as a clearinghouse for information about licensed practitioners’ paid malpractice claims and adverse actions on licensure, clinical privileges, and professional society membership. It has two main functions: (1) responding to queries about practitioners from authorized health care entities and hospitals and (2) collecting and storing adverse actions and malpractice payment information. Although the act does not require VA medical centers to participate in the Data Bank, it directs the Secretary of Health and Human Services (HHS) to enter into a memorandum of understanding with the Administrator of the Veterans Administration (now VA) to apply the reporting requirements of the act to health care facilities under VA’s jurisdiction. Accordingly, a memorandum of understanding was signed in November 1990, followed by interpretive rules effective October 1991. VA’s physician peer review process is identifying cases needing management attention at the six medical centers that we visited. Specifically, in fiscal year 1993, peer reviewers at these locations reviewed a total of 563 cases referred from the occurrence screen process involving potential quality of care problems. In 373 of these cases, peer reviewers decided that most experienced, competent practitioners would have handled the case similarly; in 136 cases, the peer reviewers believed that most experienced, competent practitioners might have handled the case differently; and in 54 cases, the peer reviewers believed that most experienced, competent practitioners would have handled the case differently. Each of the VA medical centers that we visited uses occurrence screens to identify potential physician performance problems that may warrant a peer review. Under this process, cases are screened against a predetermined list of criteria, usually by nurses. Those cases that involve one or more of the occurrences will be reviewed to identify possible problems in patient care. Occurrences that are reviewed include, but are not limited to, the following: readmittance within 10 days of an inpatient stay; readmittance within 3 days of an outpatient visit; return to special care unit, such as intensive care; return to operating room; and death. Any case for which the occurrence screen results show that a potential quality of care problem may exist is referred to the cognizant service chief for medical peer review. Table 1 shows, by medical center, how the peer reviewers rated the 563 cases. VA guidance governing peer review of potential quality of care problems identified through occurrence screens states that when peer review indicates that practitioner care is less than optimal, the cases are sent to the service chief for a determination regarding corrective action. The actions chosen by the service chief will be communicated in writing to the chief of staff and the occurrence screen program coordinator. If no action is considered necessary, a notation to that effect should be made by the service chief. However, VA guidance does not explicitly state the extent to which (1) discussions with a practitioner should be documented or (2) the reasons for no action being taken should be justified. As a result, the worksheets provided to the occurrence screen coordinator generally contained no elaboration on the action taken. Of the 50 cases we reviewed where peer reviewers believed that most experienced, competent practitioners would have handled the case differently than the physician under review, 32 resulted in a discussion with the physician, 4 resulted in no action, 8 resulted in a policy change, and 6 resulted in counseling. Table 2 shows how the service chiefs at the medical centers we visited dealt with cases that their peer reviewers believed most experienced, competent practitioners would have handled differently. Service chiefs clearly favored a discussion of problems over any other type of action. But in 32 of the 50 level 3 cases in which a discussion took place, when we asked for documentation about what was actually discussed with the practitioner about the peer review findings or what, if any, corrective actions were agreed upon, we were told by staff that they could not find information in either the occurrence screen worksheets or minutes of the service meetings. Further, in the 4 cases we reviewed in which no action was taken by a service chief on peer reviewers’ findings, there was no indication in the occurrence screen worksheets as to why a decision to take no action was justified. VA regulations require cases meeting the occurrence screen criteria to be entered into an ongoing occurrence screen database, which is reviewed and analyzed regularly to identify patterns that may be problematic. However, when actions taken by the service chiefs are not being documented for future reference, corrective actions, if taken, cannot be identified and trends cannot be established to point the way for improvement. In 14 cases, evidence was present that action was taken on the peer reviewer’s findings. Specifically, in 8 cases, medical center management revised certain policies and procedures to ensure that the problems identified by peer reviewers would not recur. In 6 cases, physicians were provided counseling on the basis of the peer reviewer’s findings and a record of the incident was placed in the physician’s privileging file. The incidents triggering formal counseling included inappropriate medical management of a patient with diabetes; failure to diagnose, monitor, and treat patients; failure to communicate resuscitation plans for a terminally ill patient; failure to monitor patient response to medication and take appropriate action; and failure to assess a patient and order the correct dose of medication. Experts believe that a significant impediment to effective peer review is the inherent subjectivity involved in determining whether a potential quality of care problem exists. The development of practice guidelines that peer reviewers can use to make performance judgments is one method suggested by experts to reduce the subjectivity. For example, practice guidelines could reduce the tendency on the part of some peer reviewers to focus on the effect of a bad patient outcome rather than whether the standard of care was met. In a 1992 Journal of the American Medical Association article, an official in VA’s Office of Quality Management stated that the development of practice guidelines would be a great aid to improve peer review. In a corroborating article, the physician writing about peer review states that peer judgments regarding appropriateness of care are strongly influenced by perceived outcomes. This suggests that the standard of care is often unclear to reviewers. Practice guidelines are being developed with increasing frequency in both VA and the medical community as a whole. However, at least one expert does not believe that it will be possible to design guidelines that will take into account every possible factor that might constitute an exception to the standard. “picking skilled physician-reviewers may be the central and critical step.