HHS: Medicare quality groups go easy on low performers

Washington -- Special contractors hired by Medicare to enforce sanctions against physicians and others providing low-quality care are imposing the minimum penalties in the majority of cases, according to a new report.

A review of Medicare quality improvement organizations by the Dept. of Health and Human Services Office of Inspector General found that QIOs rarely took the toughest actions possible against practices that were deemed to be in violation of professional standards. Twenty-eight percent of the time, the organizations took no action after confirming a quality-of-care concern.

Between 2003 and 2006, the organizations selected 318,018 cases for review, completed full reviews on 34,768 and confirmed one or more quality concerns in 6,439 cases. They recommended no action in 1,794 cases with a confirmed concern and 5,125 corrective actions in the other 4,645 cases.

"QIOs have long had the potential to be an essential frontline mechanism through which Medicare can oversee the quality of care for which it pays," the report states.

"However, QIOs assigned more than 80% of confirmed quality concerns to one of the two least serious classifications, 'care could reasonably have been expected to be better' or 'care failed to follow generally accepted guidelines or usual practice.' "

The organizations very seldom found that the "care provided was a gross and flagrant violation," the most severe classification.

When QIOs decided to take corrective actions against physicians or others between 2003 and 2006, they took the harshest actions -- initiation of sanctions or referral of the cases to licensing boards -- less than 2% of the time.

Quality improvement organizations, which were formerly known as peer review organizations, have the dual purpose of overseeing and enhancing the quality of care under Medicare.

They investigate allegations of quality, payment, utilization or coverage problems in a process driven primarily by complaints from beneficiaries and anonymous parties. But they also work with physician practices, hospitals and other Medicare participants in a more proactive way, aiming to improve quality of care before problems arise.

Conflict of interest?

QIO directors say this arrangement produces a system that works well. Others, including some lawmakers, say the organizations pull their punches on the enforcement end because they want to maintain good working relationships with doctors and hospitals that have agreed to work with them on quality improvement.

Sen. Charles Grassley (R, Iowa) said the OIG's latest report confirmed for him the presence of this conflict of interest and provides him with more reason to overhaul the organizations' responsibilities.

"A major purpose of the QIOs is to review the care provided to Medicare beneficiaries and recommend corrective actions to improve poor quality care," said Grassley, the Senate Finance Committee's lead Republican, who requested the OIG report last December. "Instead, we're getting a soft approach that too often accepts poor quality or turns a blind eye. This approach doesn't get the job done for either taxpayers or Medicare beneficiaries."

The current three-year budget cycle for the QIOs dedicates $1.2 billion to the 41 generally nonprofit organizations, which operate in all 50 states, the District of Columbia and two U.S. territories.

To restrict or expand?

The group representing quality improvement organizations said the OIG report confirms that they are appropriately pursuing enforcement actions, not shying away from them.

The report notes that QIOs often launched quality investigations even when the original complaints against the health care entities involved only payment concerns, said David Schulke, executive vice president of the American Health Quality Assn. When substandard care is discovered, the Centers for Medicare & Medicaid Services instructs quality organizations to push for correction of missteps by physicians and hospitals using the "least intrusive" methods.

"Consistent with these instructions, QIOs used the least intrusive actions in 70% of the more than 4,600 cases where providers were asked to make changes to improve quality," he said. "The agency's instructions in this regard represent a judicious exercise of the government's power."

In the typical cases in which QIOs did not take any action, the organizations determined that the quality violators already had started pursuing corrective action plans that eliminated the need for further enforcement activity, Schulke said. QIOs are encouraged to take corrective action when they find evidence of sustained quality shortfalls, not just momentary lapses. AHQA and CMS both noted in response to the report that the agency is currently reviewing its case review policies to see if any revisions are warranted.

Concerns about the potentially discordant priorities of Medicare quality improvement organizations have grown in the years since 1993, when Medicare PROs officially became QIOs in a bid to move away from strictly punitive duties toward more collaboration with physicians.

Last year, the Institute of Medicine concluded that the organizations, whose boards are typically dominated by physicians, were stretched too far in both directions. The government should transfer the enforcement tasks to other contractors, so QIOs can focus full time on quality improvement collaborations, IOM officials said.

But instead the QIOs are calling for even more responsibilities in both arenas and a larger budget with which to accomplish them. If Medicare moves toward implementing pay-for-performance across the board, the organizations want to take the lead both in collecting quality measures from physicians and helping the doctors improve their quality scores.