Government

Doctors fear bill would resurrect punitive Medicare claims reviews

A new breed of largely unregulated contractors would be tasked with finding quality, payment, utilization and coverage problems.

By David Glendinning — Posted Aug. 27, 2007

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Physicians who thought they bade good riddance years ago to Medicare's oft-maligned peer review organizations are nervously eyeing new legislation in Congress that they say would bring back the bad old days of claims review.

Senate Finance Committee Chair Max Baucus (D, Mont.) and Ranking Republican Charles Grassley (Iowa) have introduced a quality improvement bill that would create a new group of contractors called Medicare provider review organizations, or MPROs. Although not the same as the PROs of old, they would accomplish the same purpose -- investigating complaints about physicians and other Medicare participants by reviewing claims data to determine if the care in question was medically necessary and provided appropriately.

Medicare quality improvement organizations, which replaced the peer review system in the early 1990s, currently handle such evaluations. But they also work directly with physicians, hospitals and others on proactive quality improvement initiatives that are not from any investigation. The QIOs, whose boards are typically made up mostly of physicians, use much of their Medicare money to help doctors implement better care systems before any trouble arises.

This dual role has caused Baucus and Grassley to push their legislation. While the bill would enhance QIOs' quality improvement activities, it would strip away their case review responsibilities and assign them to the new MPROs. The lawmakers repeatedly have said the QIOs' desire to maintain good working relationships with their quality improvement partners causes the organizations to go too easy on physicians and hospitals that demonstrate quality, payment, utilization or coverage problems.

"QIOs currently have many diverse responsibilities. As a result, they served conflicting roles of both 'regulator' and 'technical assistant,' " Grassley said. "This conflict poses significant barriers to QIOs effectively serving either role, and we have come to learn that they really don't perform either function particularly well."

But putting a job as sensitive as case review in the hands of a new set of contractors with little requirement of physician involvement would be a big mistake, say the American Medical Association and the American Health Quality Assn., which represents QIOs. The groups that currently conduct the investigations enlist physicians with knowledge of the clinical area in question to help determine whether care was necessary and appropriate. But although the legislation calls for doctors to be included on MPRO boards, it does not specify that physician experts be involved in the actual review process.

"Medical review duties should remain within state QIOs' scope of work and should be performed by physicians who deliver patient care," said AMA Board of Trustees Chair Edward L. Langston, MD. "The creation of new entities that are interested primarily in imposing punitive actions will cause a detrimental shift away from the current focus on quality improvement and improved patient care."

Reviving the punitive aspects of the PROs but abandoning the actual peer review element would create an unregulated enforcement entity that wouldn't follow the QIO directive to use the least intrusive methods to solve quality problems, said Jonathan Sugarman, MD, MPH. He's the president and CEO of Qualis Health, the QIO serving Idaho and Washington.

"They used to call them the Medicare police. Now maybe it's the Medicare militia," he said. "It's based on the theory that enforcement and punishment are the best ways to improve care to Medicare beneficiaries, and that's not really consistent with contemporary understanding of quality improvement."

Dr. Sugarman noted that Gail Wilensky, PhD, Medicare's administrator from 1990 to 1992, often described PROs as "the most hated program in HHS." Doctors complained that the organizations would comb through claims data -- often years old -- and find that physicians had done something wrong, but the PROs wouldn't give them any idea of what to do about it. Physicians who already are losing patience with Medicare for other reasons will become even more fed up if the old, much-despised case review system is resurrected, he said.

The current dual role of the QIOs works well, because the organizations are in a good position to help Medicare physicians who have quality problems, not simply to punish them, said David Schulke, AHQA's executive vice president. By playing both parts, the QIOs can give doctors not only a reason to improve their care but also a tangible plan for doing so.

Under the legislation, MPROs would have the option of referring quality, payment, utilization or coverage problems to QIOs instead of recommending the physicians for official sanctions. QIOs also could bid to serve as MPROs themselves, an option that Schulke said some would pursue, though they could not perform both case reviews and quality consultations in the same state. The bill, however, would not expand the total quality improvement budget, meaning QIOs and MPROs would be competing for the same pot of money.

If the bill becomes law, beneficiaries who lodged complaints against Medicare doctors could see the results of the investigation. The release of these data, which could not be used in any state medical liability suit, would protect physicians while providing an important service to beneficiaries, said Judith Stein, executive director of the Center for Medicare Advocacy.

Still, the terms the bill uses to define the makeup of the new MPROs presents a big problem for the legislation, Stein said. "Interpreting and defining expertise in 'quality improvement and performance measurement' ... will be interesting and tricky, and we do not expect to see many new players on the scene."

Schulke predicted that large utilization review firms, which specialize in processing claims for private payers to assess medical necessity and cost efficiency, would be the most logical candidates to step into the MPRO shoes. Physicians likely would not appreciate this move, given that such firms are not oriented toward improving health care quality, he said.

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