Medicare: Federal Efforts to Enhance Patient Quality of Care (Chapter
Report, 04/10/96, GAO/HEHS-96-20).

Pursuant to a congressional request, GAO reviewed the Health Care
Financing Administration's (HCFA) efforts to enhance the quality of care
for Medicare beneficiaries, focusing on: (1) the strategies to ensure
that Medicare providers furnish quality health care, in both
fee-for-service providers and health maintenance organizations (HMO);
and (2) experts' views on desirable attributes of a quality assurance
strategy if more managed care options are made available to Medicare
beneficiaries.

GAO found that: (1) HCFA monitors the quality of care in the Medicare
program and has the authority to require corrective action or withhold
Medicare payments from substandard providers; (2) Medicare's quality
assurance strategies include setting minimum standards for health care
organizations and implementing systems to identify and discipline
substandard fee-for-service providers and HMO; (3) the Medicare Provider
Certification Program ensures that fee-for-service institutional health
care providers serving Medicare beneficiaries meet minimum health and
safety standards; (4) the Medicare HMO Qualification Program ensures
that HMO with contracts to serve Medicare beneficiaries meet minimum
financial and structural standards; (5) HCFA has failed to enforce
Medicare quality assurance requirements for HMO; (6) the HCFA medical
record review strategy, implemented through the Medicare Peer Review
Organization (PRO) Program, identifies providers whose care does not
meet recognized medical standards; (7) the new HCFA quality assurance
strategy, called the Health Care Quality Improvement Program, tries to
buy the best care possible for Medicare beneficiaries and reflects
state-of-the-art quality assurance practices; (8) experts believe that
programs designed to ensure quality care provided to Medicare
beneficiaries through a variety of managed care arrangements should
build on existing efforts, use many measures to evaluate care, encourage
continuous quality improvement, and make information about providers
available; and (9) the dubious nature of previous quality assurance
implementation efforts raises concern about its ability to implement its
new quality assurance strategy.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-96-20
     TITLE:  Medicare: Federal Efforts to Enhance Patient Quality of Care
      DATE:  04/10/96
   SUBJECT:  Management information systems
             Entitlement programs
             Managed health care
             Health care programs
             Health maintenance organizations
             Health services administration
             Quality assurance
             Total quality management
IDENTIFIER:  Medicare Program
             Medicare Provider Certification Program
             HCFA HMO Qualification Program
             Medicare Peer Review Program
             HCFA Health Care Quality Improvement Program
             Total Quality Management
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Health, Committee on Ways and
Means, House of Representatives

April 1996

MEDICARE - FEDERAL EFFORTS TO
ENHANCE PATIENT QUALITY OF CARE

GAO/HEHS-96-20

Medicare Quality Assurance

(101468)


Abbreviations
=============================================================== ABBREV

  AHCPR - Agency for Health Care Policy and Research
  AOA - American Osteopathic Association
  DRG - diagnosis related group
  HCFA - Health Care Financing Administration
  HEDIS - Health Plan Employer Data and Information Set
  HHS - U.S.  Department of Health and Human Services
  HMO - health maintenance organization
  NAIC - National Association of Insurance Commissioners
  NCQA - National Committee for Quality Assurance
  OBRA - Omnibus Budget Reconciliation Act
  PPO - preferred provider organization
  PRO - peer review organization
  RTI - Research Triangle Institute

Letter
=============================================================== LETTER


B-260737

April 10, 1996

The Honorable William Thomas
Chairman, Subcommittee on Health
Committee on Ways and Means
United States House of Representatives

Dear Mr.  Chairman: 

In response to your request, we conducted a study of Medicare efforts
to enhance quality of care for beneficiaries.  We found that the
Health Care Financing Administration (HCFA) is modifying its Medicare
quality assurance programs to incorporate the latest research on
outcome indicators and current concepts of continuous quality
improvement.  These changes are generally consistent with strategies
suggested by the experts we interviewed and literature we reviewed on
quality assurance systems.  We found, however, that HCFA's efforts in
distributing comparative performance data lag behind those of state
agencies and many employers in the private sector.  Furthermore,
GAO's analysis of HCFA's previous implementation efforts raises
concerns about how well HCFA will implement comprehensive programs to
deal effectively with poorly performing providers and improve all
providers' performance. 

This report was prepared under the direction of David P.  Baine,
Director, Health Care Delivery and Quality Issues, and Sandra K. 
Isaacson, Assistant Director.  Other staff contributing to this
report are James Carlan, Assistant Director; Jean Chase, Evaluator;
Nancy J.  Donovan, Senior Evaluator; Darrell Rasmussen, Senior
Evaluator; and Peter E.  Schmidt, Senior Evaluator.  If you have any
questions, they can be reached at (202) 512-7101. 

We are sending copies of this report to appropriate congressional
committees and other interested parties.  We will also make copies
available to others upon request. 

Sincerely yours,

Carlotta C.  Joyner
Associate Director
Health Care Delivery and Quality Issues


PURPOSE
====================================================== Chapter SUMMARY

In the past decade, Medicare costs have risen at an average rate of
over 10 percent per year.  This continued growth has prompted
stakeholders to seek methods to slow down or reduce the cost of
services.  Because managed care is viewed as less costly than
fee-for-service health care, one proposal put forth is to expand
managed care options for Medicare beneficiaries.  Many are concerned,
however, that cost reductions may result in poor quality of care
provided to Medicare beneficiaries.  Currently, the Medicare program
reimburses only for care provided in health maintenance organizations
(HMO) and by the fee-for-service sector.  If managed care options are
expanded, however, stakeholders want to ensure that the quality of
care furnished to Medicare beneficiaries does not suffer. 

Concerned about ensuring quality in managed care plans that have not
participated in Medicare, the Chairman of the Subcommittee on Health
of the House Committee on Ways and Means requested that GAO (1)
discuss the present and future strategies of the Health Care
Financing Administration (HCFA), which administers the Medicare
program, to ensure that Medicare providers furnish quality health
care, in both fee-for-service and HMO arrangements and (2) obtain
experts' views on desirable attributes of a quality assurance
strategy if more managed care options are made available to Medicare
beneficiaries.  In meeting these objectives, GAO interviewed health
care experts and HCFA officials, reviewed quality-related literature
and HCFA documents, and drew on previous GAO work. 


   BACKGROUND
---------------------------------------------------- Chapter SUMMARY:1

HCFA oversees programs established to monitor quality of care in the
Medicare program and ensures that corrective action is taken when
problems are found.  In 1965, passage of Medicare legislation turned
the federal government into the nation's single largest payer for
health care and made it responsible for ensuring that beneficiaries
receive good-quality care.  This legislation mandated specific
programs to help ensure that medical services purchased on behalf of
beneficiaries met minimum quality standards.  Subsequent legislation
created a medical record review program for ensuring that
institutional providers meet minimum standards for delivering
appropriate and technically correct care.  Over time, HCFA's quality
assurance programs have changed in response to shifting utilization
patterns created by new Medicare payment methodologies. 

Quality of care is the degree to which health services for
individuals and populations increase the likelihood of desired health
outcomes and are consistent with current professional knowledge. 
Most quality assurance programs used by regulators and providers use
performance indicators to measure whether established standards have
been met.  Indicators can be classified according to those that
measure (1) structure--the capacity of an institution, health system,
practitioner, or provider to deliver quality health care; (2)
process--physician and other provider activities performed to deliver
the care; and (3) outcomes--the results of physician and provider
activities.  Today's quality assurance strategies focus on continuous
quality improvement, which encourages all providers to perform
better.  This differs from past strategies, which tended to focus
more on individual providers' substandard efforts. 


   RESULTS IN BRIEF
---------------------------------------------------- Chapter SUMMARY:2

HCFA has two main quality assurance strategies.  The first, called
certification, includes (1) the Medicare Provider Certification
Program, under which state agencies or private accrediting bodies
assess whether fee-for-service institutional providers meet certain
Medicare standards, and (2) the HMO Qualification Program, under
which HCFA personnel assess whether HMOs meet similar requirements. 
The second, called medical record review, includes the Medicare Peer
Review Program, under which peer review organizations (PRO) evaluate
inpatient care and ambulatory surgery furnished under fee-for-service
arrangements or by HMO providers.  GAO has reported serious problems
with implementation of these programs and, in certain cases, with
their effectiveness. 

When discussing appropriate federal quality assurance strategies,
experts described an approach that (1) builds on existing federal,
state, and private efforts; (2) uses multiple strategies to evaluate
care; (3) encourages continuous quality improvement; and (4) makes
information about providers available to beneficiaries and others in
a useful and understandable way. 

HCFA's recently proposed changes to enhance its quality assurance
program are generally consistent with the strategies recommended by
several health care experts GAO interviewed.  HCFA's new quality
assurance strategy, called the Health Care Quality Improvement
Program, builds on its current programs and parallels private- sector
developments.  According to HCFA officials, this program emphasizes
cooperation with providers, continuous quality improvement,
development of performance measures, and improved information about
beneficiaries' satisfaction with the care they receive in
fee-for-service arrangements and HMOs.  Unlike some private- sector
purchasers, however, HCFA does not yet provide Medicare beneficiaries
with health plan-specific information to help them make their health
care purchasing decisions.  Furthermore, GAO's analysis of HCFA's
previous implementation efforts raises concerns about how well HCFA
will implement comprehensive programs that deal effectively with
poorly performing providers as well as improve all providers'
performance. 


   PRINCIPAL FINDINGS
---------------------------------------------------- Chapter SUMMARY:3


      HCFA HAS TWO MAIN QUALITY
      ASSURANCE STRATEGIES
-------------------------------------------------- Chapter SUMMARY:3.1

Medicare's two main quality assurance strategies--certification and
medical record review--are intended to help ensure that Medicare
beneficiaries receive good-quality care.  The first, HCFA's
certification strategy, includes two major programs:  the Medicare
Provider Certification Program, directed at fee-for-service
institutional health care providers, and the Medicare HMO
Qualification Program, directed at HCFA's Medicare HMOs.  Both focus
on ensuring that providers meet minimum structural and process
requirements.  GAO has frequently reported, however, that HCFA has
failed to aggressively enforce the requirements of these two
programs.\1

HCFA's medical review strategy uses PROs to monitor providers'
actions through reviews of individual medical records to determine
patterns of poor or inappropriate care.  If problems are identified,
PROs work with providers to correct the problems and in extreme cases
recommend a monetary penalty or suspension from the Medicare program. 
GAO concluded in 1991 and again in 1995 that HCFA had failed to
systematically incorporate the results of PRO review into its HMO
monitoring process.\2


--------------------
\1 Medicare:  Experience Shows Ways to Improve Oversight of Health
Maintenance Organizations (GAO/HRD-88-73, Aug.  17, 1988); Health
Care:  Actions to Terminate Problem Hospitals From Medicare Are
Inadequate (GAO/HRD-91-54, Sept.  5, 1991); and Medicare:  HCFA Needs
to Take Stronger Actions Against HMOs Violating Federal Standards
(GAO/HRD-92-11, Nov.  12, 1991). 

\2 Medicare:  PRO Review Does Not Ensure Quality of Care Provided by
Risk HMOs (GAO/HRD-91-48, Mar.  13, 1991) and Medicare:  Increased
HMO Oversight Could Improve Quality and Access to Care
(GAO/HEHS-95-155, Aug.  3, 1995). 


      HCFA'S QUALITY ASSURANCE
      PROGRAM GENERALLY CONSISTENT
      WITH EXPERTS' VIEWS
-------------------------------------------------- Chapter SUMMARY:3.2

The experts GAO interviewed suggested four broad strategies for a
federal quality assurance program: 

  Build on existing federal, state, and private efforts.  These could
     include state initiatives, such as those patterned after the
     National Association of Insurance Commissioners' (NAIC) model
     standards, government certification, private accreditation, and
     the use of PROs. 

  Use multiple strategies to evaluate care.  In addition to
     accreditation, experts discussed the use of other performance
     measures, including outcome measures and patient satisfaction
     surveys.  Until outcome measures are more fully developed,
     however, the experts suggested continued use of other, more
     traditional performance measures. 

  Encourage continuous quality improvement.  Experts believe that
     continuous quality improvement programs can identify previously
     undetected problems, provide management with constructive
     feedback, and help providers and plans to improve their health
     services. 

  Make information about providers available to beneficiaries and
     others in a useful and understandable way.  Experts stressed
     that the federal government should share with beneficiaries
     information gathered about quality of care to help beneficiaries
     in their health care purchasing decisions. 

The experts expressed varying views on implementing these strategies
regarding the most appropriate type of performance data to collect
and who should verify and evaluate the data once collected. 
Furthermore, they suggested reexamining federal quality assurance
strategies for the entire spectrum of Medicare providers--from
managed care organizations to fee-for-service providers. 

HCFA's new Health Care Quality Improvement Program is generally
consistent with the four broad strategies cited by the experts GAO
interviewed.  HCFA plans to modify its quality assurance strategies
to emphasize outcomes and improvement in the quality of care.  This
program will build on HCFA's current certification and medical record
review quality assurance strategies.  For example, HCFA is currently
deemphasizing structure and process measures as the bases for its
certification decisions and is preparing to implement outcome
indicators for hospitals, nursing homes, and other provider types. 
Additionally, HCFA is reengineering the entire PRO program to
incorporate continuous quality improvement concepts.  PROs will
deemphasize individual case review in favor of cooperative projects
with hospitals and HMOs. 

HCFA officials are planning a beneficiary satisfaction survey
designed to collect data from Medicare beneficiaries in HMOs.  HCFA
officials also have plans to provide Medicare beneficiaries with
information to help them choose providers.  The timetable for
implementation remains unclear, however, because of perceived
difficulties in presenting complex comparative data to consumers in
an easily understood way. 


   AGENCY COMMENTS
---------------------------------------------------- Chapter SUMMARY:4

HCFA did not agree with GAO's concerns about how well HCFA will
implement its new quality assurance initiative and its plans for
providing information to beneficiaries.  On the basis of GAO's past
studies of HCFA's quality assurance implementation efforts, however,
GAO remains concerned about whether HCFA will implement its new
comprehensive program so that it detects and corrects poorly
performing providers and improves all providers' performance.  In
addition, GAO believes that some of the information now being
collected by HCFA could be published and disseminated to Medicare
beneficiaries.  HCFA also provided specific technical comments, which
we incorporated as appropriate. 


INTRODUCTION
============================================================ Chapter 1

In the past decade, Medicare costs have risen at an average rate of
over 10 percent per year.  Medicare program benefit payments have
increased from $69.5 billion in 1985 to an estimated $180 billion in
1995,\3 prompting the Congress and others to search for ways to
reduce the program's rate of growth.  One proposal put forth is to
increase the managed care choices of Medicare beneficiaries who may
be considering enrolling in a managed care plan.\4 Although
stakeholders believe that managed care organizations can furnish
needed services to beneficiaries at less cost than fee-for-service
arrangements, they are concerned about ensuring that those
beneficiaries who enroll receive high-quality care.\5


--------------------
\3 Estimate is for fiscal year.  Amounts are not adjusted for
inflation. 

\4 Currently, Medicare pays only for health care furnished by
providers working on a fee-for-service basis or within a health
maintenance organization (HMO) or hospice. 

\5 Medicare also contracts with organizations meeting the statutory
definition of a competitive medical plan.  Because these
organizations are in most respects similar to HMOs, in this report we
use the term "HMO" to cover both.  In addition, HCFA contracts on a
reasonable cost basis with the organizations called Health Care
Prepayment Plans, which cover only Medicare part B services. 


   DEFINING QUALITY OF CARE
---------------------------------------------------------- Chapter 1:1

According to the Institute of Medicine, quality of care is defined as
"the degree to which health services for individuals and populations
increase the likelihood of desired health outcomes and are consistent
with current professional knowledge."\6 To evaluate whether quality
of care is being provided to those individuals and populations, one
or more of the following attributes usually are measured: 

  appropriateness (patients receive the right care at the right
     time),

  technical excellence (providers furnish care in the correct way),

  accessibility (patients obtain care when needed), and

  acceptability (patients are satisfied with their care). 

These attributes can be assessed by regulators, providers, or others
using performance indicators that measure organizational structures,
provider actions, and the results of care.  Structure indicators
measure the capacity of an institution, health system, practitioner,
or provider to deliver quality health care.  Having a safe and clean
facility and a quality assurance program in place in an organization
are examples of structure indicators.  Process indicators measure
what a provider does to and for the patient.  Identifying and
evaluating what diagnostic tests a physician performs when examining
a patient with chest pain is an example of a process indicator. 
Outcome indicators measure the results of providers' actions and are
viewed as the most direct measure of the quality of care furnished
because they represent the providers' success.  Examples of outcome
indicators are mortality, complications resulting from surgery,
patient satisfaction with the care received, and functional status.\7


--------------------
\6 Institute of Medicine, Medicare:  A Strategy for Quality
Assurance, Kathleen Lohr, ed.  (Washington, D.C.:  National Academy
Press, 1990). 

\7 Functional status is the extent to which people can perform
activities of daily living and their basic social roles. 


   APPROACHES TO DEVELOPING
   QUALITY ASSURANCE PROGRAMS
---------------------------------------------------------- Chapter 1:2

Assessing quality of care involves reaching consensus about standards
and developing reliable and valid structure, process, and outcome
measures.  If the standards are not met, then providers and
regulators must develop approaches to make it more likely that health
care is furnished in ways that meet the standards. 

In the past, quality assurance programs focused on the care provided
to individual patients.  These programs tended to direct improvement
activities toward individual providers identified as responsible for
mistakes rather than encourage improvement in overall health care
delivery.  As a result, quality assurance efforts focused on a few
providers, and the effects of these efforts were limited to a small
percentage of the population.  Furthermore, these programs often
resulted in adversarial relations between the reviewers and those
being reviewed.  In recent years, approaches to quality assurance
have begun to focus on continuous quality improvement.  Under this
approach, attempts are made to identify and establish excellent care
by focusing attention on inappropriate variation in the quality of
care furnished to identified populations and eliminating the
variations.  This approach strives to make everyone's performance
better, regardless of prior performance.  Other recent approaches to
quality assurance have also included initiatives for collecting and
disseminating information on performance measures.  The Health Plan
Employer Data and Information Set (HEDIS) is a major attempt to
advance the collection of information on quality of care
indicators.\8 HEDIS indicators of health plan activities in five
performance areas have been adopted by many large health care
purchasers and some regulators to gauge the quality of care provided
by health plans.\9

Attempts to advance the dissemination of HEDIS and other information
on quality of care include the publication of "report cards" by
health plans intended to describe their performance measured against
selected performance indicators.  Employers are also providing
quality of care performance information to their employees about
health plans with which they contract.  For example, the California
Retirement System recently distributed a report containing both
performance indicators about quality and member satisfaction survey
results.\10


--------------------
\8 Initial development efforts were organized by The HMO Group, a
coalition of group and staff HMOs.  Subsequent revision of these
measures has occurred under the auspices of the National Committee on
Quality Assurance (NCQA). 

\9 The five performance areas are quality, access and patient
satisfaction, membership and utilization, finance, and health plan
management. 

\10 In our report, Health Care:  Employers and Individual Consumers
Want Additional Information on Quality (GAO/HEHS-95-201, Sept.  29,
1995), we discuss in more detail the kind of information employers
and individual consumers find useful and the kinds of information
they want in the future. 


   FEDERAL GOVERNMENT'S ROLE IN
   ENSURING QUALITY OF CARE FOR
   MEDICARE BENEFICIARIES
---------------------------------------------------------- Chapter 1:3

HCFA oversees programs established to monitor quality of care in the
Medicare program and ensures that corrective action is taken when
problems are found.  In 1965, passage of federal Medicare legislation
turned the federal government into the nation's single largest payer
for health care and made it responsible for ensuring that
beneficiaries receive good-quality care.\11 This legislation mandated
that the government establish specific programs to help ensure that
medical services purchased on behalf of beneficiaries meet minimum
quality standards.  Over time, these programs have changed in
response to shifting utilization patterns created by new Medicare
payment methodologies. 

Initially, the mandated quality assurance programs focused on setting
minimum structural standards for hospitals and other institutional
providers to ensure that they could deliver care of acceptable
quality.  In 1986, in response to changes in hospital care delivery
systems, HCFA modified its hospital certification program to include
more process measures.  Also, when the Medicare program began to
contract with HMOs, structural standards to help ensure the capacity
of HMOs to deliver care were established.  Subsequent legislation
created a medical record review program for ensuring that
institutional providers meet minimum standards for delivering
appropriate and technically correct care.  This program, however,
tended to focus more on utilization of medical services rather than
the quality with which they were delivered. 

As a result of hospital and HMO reimbursement changes in the early
1980s intended to control rising Medicare costs, hospitals had the
perverse incentive to admit patients unnecessarily and discharge them
prematurely.  Also, hospitals and HMOs had an incentive to skimp on
costly care.  To counter these incentives, the Congress redesigned
the Medicare medical record review program to focus on detecting
unnecessary hospital admissions and substandard care and by mandating
the inclusion of HMOs. 

In overseeing the quality of care furnished by Medicare providers,
HCFA has a range of ways to address providers' failure to meet
established standards.  Usually HCFA begins by requiring that
providers take timely corrective action to address the identified
deficiencies.  Ultimately, the agency has the authority to suspend
Medicare payment to substandard providers. 


--------------------
\11 The Social Security Amendments of 1965 (P.L.  89-97). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:4

In April 1995, the Chairman of the Subcommittee on Health of the
House Committee on Ways and Means asked us to examine ways to best
ensure that professional, quality health care would be furnished
across a broad spectrum of health plans.  Currently, HCFA reimburses
for care provided only by the fee-for-service sector or by HMOs.  The
Chairman requested that we (1) discuss HCFA's present and future
strategies to ensure that Medicare providers furnish quality health
care in both fee-for-service and HMO arrangements and (2) obtain
experts' views on desirable attributes of a quality assurance
strategy if more managed care options are made available to Medicare
beneficiaries. 

To analyze HCFA's present and future plans, we reviewed documents on
HCFA's efforts and plans, conducted interviews with HCFA officials,
and drew on previous GAO reports.  To obtain the views of experts, we
conducted over 30 structured interviews with experts selected to
represent a wide range of perspectives, including those of health
plans, health care researchers, federal and state agencies, major
purchasers of health care, and accrediting agencies.  (See app.  II
for a list of the experts we interviewed and their affiliations.) We
also reviewed literature about measuring the quality of health care,
articles about major health care purchasers' initiatives, and
previous GAO reports on measuring provider performance.  We presented
initial findings from our work in testimony before the Subcommittee
on July 27, 1995.\12

Our work was performed between April and December of 1995 in
accordance with generally accepted government auditing standards. 


--------------------
\12 Medicare:  Enhancing Health Care Quality Assurance
(GAO/T-HEHS-95-224, July 27, 1995). 


HCFA'S MEDICARE QUALITY ASSURANCE
STRATEGY IS BASED ON COMPLIANCE
WITH STANDARDS
============================================================ Chapter 2

Since its inception, Medicare has had two major quality assurance
strategies to ensure that beneficiaries receive quality care.  Until
recently, these strategies were based on a regulatory
approach--setting minimum standards for health care organizations and
implementing systems to identify and discipline substandard
providers.  HCFA's two strategies cover both fee-for-service
providers and HMOs.  The first, certification, is intended to ensure
that minimum structural requirements, such as appropriate staffing
and minimum process requirements (for example, an infection control
system that identifies and corrects problems), exist to allow for
quality care.  The second, review of beneficiary medical records, is
intended to ensure that the processes of care reflect the current
best practices in the community.  HCFA, however, has not always fully
used available information in its monitoring programs nor acted
effectively when significant problems were found.  As a result, HCFA
cannot ensure that Medicare beneficiaries are receiving quality care. 


   HCFA'S CERTIFICATION STRATEGY
   HAS SEPARATE PROGRAMS FOR
   FEE-FOR-SERVICE AND HMOS
---------------------------------------------------------- Chapter 2:1

HCFA's certification strategy includes two major programs.  The
Medicare Provider Certification Program, in existence since
Medicare's inception in 1965, is directed at ensuring that
fee-for-service institutional health care providers serving Medicare
beneficiaries meet minimum health and safety requirements.  The other
program, HCFA's Medicare HMO Qualification Program, dates to the
origin of the Medicare HMO contracting program in the Social Security
Amendments of 1972.  This program was established to ensure that HMOs
with contracts to serve Medicare beneficiaries meet minimum financial
and structural standards. 


      THE MEDICARE PROVIDER
      CERTIFICATION PROGRAM
      ASSESSES FEE-FOR-SERVICE
      INSTITUTIONAL PROVIDERS
-------------------------------------------------------- Chapter 2:1.1

Medicare law requires institutional providers of care, such as
hospitals and nursing homes receiving direct fee-for-service Medicare
payments, to comply with certain physical and organizational
requirements.  These requirements are usually called conditions of
participation.\13 Conditions of participation identify minimum
standards that policymakers thought were necessary to be met for
quality health care to occur.  In the past, the conditions related
almost exclusively to structural quality of care indicators.  This
remains largely true for hospitals, although a 1986 revision added
some process indicators.\14 A full-service community hospital must
meet 20 conditions of participation regarding such matters as the
hospital's governing body, physical plant, clinical and emergency
services, nursing service, and food service.  Each condition is
subdivided into multiple standards, most of which must be met if an
institution is to comply with the condition.  Surveyors who review
the hospital to determine its compliance with the conditions have
usually only determined whether the institution has established the
necessary policies and procedures to meet the conditions of
participation.  Federal regulations and survey procedures do not
require surveyors to determine what actual patient outcomes have
been.\15

In the mid-1980s, HCFA officials began to work toward modifying
conditions of participation for other types of institutions to focus
the conditions more toward beneficiary outcomes.  According to the
officials, this process began in 1986 with modification of the survey
process for nursing homes to emphasize review of patient outcomes and
the provision of patient care services.  HCFA implemented major
revisions of the conditions of participation for home health agencies
and nursing homes in 1991 and 1992, respectively.\16 Finally, in
April of 1995, HCFA implemented new outcome-oriented survey
procedures for renal dialysis facilities. 

Certification surveys intended to determine whether an institution is
in compliance with the conditions are performed by either state
agencies or private accrediting organizations.  HCFA contracts
directly with state agencies to perform certification surveys of some
institutional providers.  However, HCFA deems a hospital's or home
health agency's accreditation by a designated private accrediting
organization to be adequate assurance that the provider meets the
conditions of participation.\17 If a hospital or home health agency
does not request accreditation from such an accrediting organization,
the state agency where the institution is located will perform the
certification survey. 

When deciding whether to grant a private accrediting organization
deeming status, HCFA reviews the policies of the accrediting
organization to determine that the organization, among other things,

  has accreditation requirements that are at least equivalent to
     Medicare certification requirements;

  has survey teams and procedures adequate to detect problems, ensure
     corrective action, and meet Medicare requirements for the
     frequency and prior announcement of visits; and

  is willing to provide HCFA with a copy of the most current
     accreditation survey and any other information on the survey,
     including corrective action plans, that HCFA may require. 

HCFA grants private accrediting agencies deeming authority for a
6-year period.\18 (app.  III lists the organizations whose
accreditation is deemed equivalent to HCFA certification; it also
lists other organizations that accredit institutional health care
providers or units within providers.)

Regardless of whether HCFA or state agency personnel perform the
review, the process used to determine whether an institution meets
certification requirements involves an on-site survey\19 by a team of
registered nurses and persons trained in other health-related
disciplines.  This survey may take several days depending on the type
and size of provider.  The survey includes a thorough review of the
provider's policies, procedures, and systems.  At the conclusion of
the inspection, the team meets with appropriate provider officials
and informs them of its findings.  Subsequently, the team prepares a
formal written report and sends it to the provider.  If the team
finds that the provider does not comply with one or more conditions
of participation, it will ask the provider to submit a corrective
action plan, including a timetable.  At the end of the time period
specified in the plan's timetable, the surveying agency may perform a
limited resurvey to ensure that all identified problems have been
corrected, or it may require the provider to submit documentation
that corrective action has occurred. 

If the provider does not comply with conditions by the end of the
time period in the plan's timetable, or if the problem was severe
enough to seriously endanger Medicare beneficiaries, HCFA may revoke
the provider's certification to receive Medicare payment.  In our
1991 review of the Medicare hospital certification program, however,
we found that HCFA rarely terminated hospitals from the Medicare
program even though they might have been out of compliance with
Medicare requirements months longer than anticipated or allowed by
regulation.  This situation occurred because federal and state
officials preferred to work with substandard hospitals to bring them
into compliance, political pressures were exerted to keep them open
if possible, and quality problems less obvious than gross negligence
were difficult to document.  This apparent unwillingness to terminate
noncompliant hospitals has cast some doubt on HCFA's willingness to
act against any but the very worst hospitals.\20 While terminating
hospitals from Medicare is usually undesirable except as a last
resort, we reported that HCFA should terminate facilities that are
persistently noncompliant with conditions of participation. 

To ensure that state agencies and private accrediting organizations
are performing their surveys adequately, HCFA performs validation
surveys.  HCFA personnel conduct validation surveys on a small
percentage of the facilities surveyed by state agencies; in addition,
HCFA contracts with state agencies to conduct validation surveys of
the facilities surveyed by private accreditors.  In 1993, state
agency personnel performed 181 validation surveys among the
approximately 5,200 hospitals accredited by the Joint Commission. 
The 1993 HCFA annual report on validation surveys of hospitals
accredited by the Joint Commission concluded that a decline over
several years in the percentage of hospitals found by the validation
surveys to have general health and safety deficiencies provided
increased assurance that accredited hospitals met federal standards. 
However, some problems continued with the Joint Commission's
enforcement of the Life Safety Code.\21 In 1994, HCFA personnel
performed 863 validation surveys among 15,493 nursing homes surveyed
by state agencies.  HCFA officials told us that the results of HCFA's
monitoring program for state survey agencies indicate that state
agency performance of nursing home reviews is in some cases uneven. 
However, they said that they had assessed the problem and were now
working with state agencies to help them improve through problem
identification, consultation, and training. 


--------------------
\13 Other types of providers covered by this program include
psychiatric hospitals, home health agencies, clinics, and
rehabilitation agencies.  Certain more specialized providers, such as
organ procurement organizations, suppliers of portable X-ray
services, and physical therapists in independent practice providing
outpatient physical therapy services must meet conditions of coverage
similar to conditions of participation to receive Medicare
reimbursement.  Conditions of participation for long-term care
facilities, significantly altered by the Congress in 1987, are now
termed "requirements."

\14 HCFA is revising hospital conditions of participation to reorient
them toward patient outcomes.  See chapter 3. 

\15 HCFA is changing its certification requirements to a more
outcome-oriented approach.  HCFA's plans are discussed in detail in
chapter 3. 

\16 See chapter 3 for a more extensive discussion of the new
conditions of participation for nursing homes. 

\17 HCFA is considering extending deeming authority to private
organizations that accredit ambulatory surgical centers. 

\18 The Joint Commission's deeming authority for hospitals is
specified by statute and has no time limit. 

\19 Hospitals accredited by the Joint Commission are surveyed every 3
years.  Nursing homes and home health agencies must by law be
surveyed annually.  According to HCFA, because of budgetary
constraints, other types of providers are surveyed less frequently. 

\20 Health Care (GAO/HRD-91-54, Sept.  5, 1991). 

\21 The Life Safety Code is a consensus standard adopted by the
National Fire Protection Association and incorporated by reference
into the conditions of participation. 


      THE MEDICARE HMO
      QUALIFICATION PROGRAM
-------------------------------------------------------- Chapter 2:1.2

HMOs wanting to provide health care services to Medicare
beneficiaries on a risk or cost basis must have a contract with the
Medicare program.\22 Under HCFA's Medicare HMO Qualification Program,
HCFA personnel visit HMOs with cost or risk contracts at least once
every 2 years to monitor their compliance with Medicare
requirements.\23 The site visits are similar to those used in the
Medicare Provider Certification Program.  HCFA personnel spend
several days at the HMO comparing the HMO's policies and procedures
with Medicare requirements.  The monitoring team informs the HMO of
its preliminary findings at the end of the visit and later prepares a
formal report.  If the HMO has failed to meet one or more
requirements, it must submit a corrective action plan, including a
timetable for correcting the deficiency.  HCFA may revisit the site
to monitor compliance at the end of the time period specified in the
plan's timetable, or it may simply require regular progress reports. 
If the HMO fails to correct the deficiency in a timely manner, HCFA
may terminate the HMO's Medicare contract or, under some
circumstances, impose a civil monetary penalty or suspend Medicare
enrollment. 


--------------------
\22 HMOs that have a risk contract with HCFA are paid a fixed amount
for each enrolled beneficiary based on the average Medicare costs for
all beneficiaries in the HMOs' service area.  Cost HMOs are paid by
HCFA a predetermined monthly amount per beneficiary based on a total
estimated budget.  These payments are retrospectively adjusted on the
basis of the HMO's report of its incurred costs.  HMOs may also opt
to be reimbursed on a fee-for-service basis.  In this case, they are
not subject to the Medicare HMO qualification process. 

\23 In this report, the term "HMO Qualification Program" refers to
HCFA's program for ensuring that HMOs meet all Medicare requirements. 
Some of these are contained in title 13 of the Public Health Service
Act and others in title 18 of the Social Security Act.  This term may
also be used to refer to the process of ensuring that HMOs meet the
requirements for federal qualification contained in title 13 above. 
HCFA has announced that it will perform site visits at all HMOs
annually, beginning in fiscal year 1996.  HCFA does not accept
private organization accreditation or state agency certification as
evidence that an HMO meets federal standards. 


      INADEQUATE ENFORCEMENT OF
      MEDICARE HMO QUALITY
      ASSURANCE REQUIREMENTS
-------------------------------------------------------- Chapter 2:1.3

We have criticized HCFA for failing to aggressively enforce Medicare
quality assurance requirements for HMOs.  In 1988 and again in 1991,
we found that HCFA's efforts to obtain corrective action from a few
noncompliant HMOs were largely ineffective even though HCFA
repeatedly requested such action.\24 Furthermore, HCFA often found
that the same problems existed when it made its next annual
monitoring visit.\25 We found the same problems again in an August
1995 report.\26 We concluded that HCFA's Qualification Program is
inadequate to ensure that Medicare HMOs comply with standards for
ensuring quality of care.  Specifically, this program remains
inadequate for four main reasons: 

  HCFA does not determine if HMO quality assurance programs are
     operating effectively.  HCFA's routine compliance monitoring
     reviews do not go far enough to verify that HMOs monitor and
     control quality of care as federal standards require.  The
     reviews check only that HMOs have procedures and staff capable
     of quality assurance and utilization management--not for
     effective operation of these processes. 

  HCFA does not systematically incorporate the results of PRO review
     of HMOs or use PRO staff expertise in its compliance
     monitoring.\27 A routine HCFA site visit to an HMO generally
     involves about three people without specialized clinical or
     quality assurance training, who spend a week or less focused
     largely on Medicare requirements for administration, management,
     and beneficiary services rather than on medical quality
     assurance.  About a third of staff time is typically spent on
     quality-related matters.  PRO staff generally have the
     specialized clinical training needed to perform quality
     assurance reviews. 

  HCFA does not routinely collect utilization data that could most
     directly indicate potential quality problems.  In the
     fee-for-service sector, claims data are available and can be
     used to detect potential overutilization of services.  Although
     HCFA has the authority to require HMOs to collect such data and
     federal standards require that HMOs have information systems to
     report utilization data and management systems to monitor
     utilization of services, no comparable data exist for use in the
     Medicare HMO Qualification Program to detect potential
     underutilization.  As a result, even such basic information as
     hospitalization rates; the use of home health care; or the
     number of people receiving preventive services, such as
     mammograms, is unknown. 

  HCFA does not evaluate HMO risk-sharing arrangements with
     providers.  The agency does not routinely assess whether HMO
     risk-sharing arrangements create a significant incentive to
     underserve, although in the Omnibus Reconciliation Act (OBRA) of
     1990, the Congress gave the Department of Health and Human
     Services (HHS) authority to limit arrangements that it found
     provided an excessive incentive to underserve.  As of March 15,
     1996, the Department had not yet issued final regulations on
     methods for gauging how much risk an HMO can legitimately pass
     to providers and requirements that providers must meet to accept
     such risk.  However, a HCFA official told us that HCFA expected
     to publish these regulations shortly. 

We also found that enforcement processes remain slow when HCFA does
find quality problems or other deficiencies at HMOs that do not
comply promptly with federal standards.  For example, between 1987
and 1994, HCFA repeatedly found that a Florida HMO did not meet
Medicare quality assurance standards and received PRO reports
indicating that the HMO was providing substandard care to a
significant number of beneficiaries.  During this period, it
permitted the HMO to operate as freely as a fully compliant HMO.\28

We also found that HCFA does not routinely release its site visit
reports to the public.\29 Consequently, when an HMO is found to
violate federal standards, Medicare beneficiaries may not know of
quality problems that might influence their decision to join or
remain enrolled in that HMO. 


--------------------
\24 Medicare (GAO/HRD-88-73, Aug.  17, 1988) and Medicare
(GAO/HRD-92-11, Nov.  12, 1991). 

\25 Although HCFA normally performed HMO monitoring visits every 2
years, it often increased the frequency to annually for HMOs with
serious problems. 

\26 Medicare (GAO/HEHS-95-155, Aug.  3, 1995). 

\27 Although HCFA's 1995 HMO monitoring protocol covers PRO reviews,
it does so in the context of ensuring that the HMO cooperates with
the PRO review process and incorporates the results of the review
into the HMO's own quality assurance process.  We are advocating that
HCFA incorporate the results of PRO reviews into HCFA's HMO
Qualification Program in a systematic way.  For example, PRO findings
might be used as one basis for evaluating the effectiveness of the
HMO's quality assurance system. 

\28 On July 5, 1995, HCFA declared the HMO in compliance with
requirements. 

\29 The public may obtain these reports under the Freedom of
Information Act. 


   THE MEDICARE PEER REVIEW
   ORGANIZATION (PRO) PROGRAM
---------------------------------------------------------- Chapter 2:2

HCFA's medical record review strategy, implemented through the
Medicare PRO program, was designed to identify providers whose care
does not meet recognized medical standards.  PROs generally have been
required to focus their reviews on care furnished to beneficiaries on
a fee-for-service basis in hospitals and outpatient surgical centers
and care furnished by HMOs.  Although HCFA may use the PRO program to
review care provided to beneficiaries in other settings such as
physicians' offices, it has chosen not to use this authority because
reviewing care at all private U.S.  physicians' offices would be
overwhelming. 

Until recently, the PROs' primary review method was to monitor
providers' actions through reviews of individual medical records.  A
number of sampling strategies have been used to select records for
review.  The prevailing strategy in the fee-for-service sector has
been to draw a random sample only from Medicare hospital admissions. 
However, other samples drawn from hospital admissions have focused on
areas perceived to be at high risk, for example, cases in which
potentially adverse events such as hospital readmission within 31
days of a discharge have occurred.  In the HMO sector, the PROs drew
a random sample of enrolled beneficiaries, both living and recently
deceased, and asked the HMOs to determine which of these sampled
beneficiaries had received either ambulatory or inpatient services
during the period in question.  For these beneficiaries, the PRO
reviewed the medical records for all care furnished by the HMO over a
12-month period in both ambulatory and inpatient settings. 

PRO medical review usually begins when a reviewer employed by the PRO
reviews the selected medical record.\30 If a problem is found, the
medical record is referred to a PRO physician.  If the PRO physician
believes that a quality concern might exist, the PRO writes to the
providers responsible for the patient's care and gives them the
opportunity to provide an explanation for the potential concern. 
Then, if the concern is not resolved, it is referred for further
review to a physician who is a specialist in the type of care being
questioned.  If a provider demonstrates a pattern of confirmed
problems, the cases are sent to the PRO's medical review committee,
composed mainly of physicians, which determines whether a corrective
action plan is necessary to prevent similar problems from occurring
in the future.\31 If the provider will not or cannot correct the
identified poor practice, the PRO may recommend that the HHS Office
of Inspector General impose a sanction.  Possible sanctions include
suspension of eligibility to receive reimbursement from the Medicare
program for a specified period or monetary penalties. 

The PRO program has been criticized by providers and other health
care experts because of the adversarial role some experts believe the
PROs have taken.  Furthermore, relatively few substandard providers
have been identified as a result of this approach.  The medical
review model used by the PROs focused on the detection and correction
of individual aberrant providers.  HCFA officials found this
particular model to be confrontational, unpopular with the physician
community, and of limited effectiveness. 

In the past, we have also been critical of HCFA's use of the PRO
program to monitor HMOs.  In a 1991 report, we cited several problems
with the PROs' ability to monitor care provided by HMOs with risk
contracts.\32 First, although HCFA contracted with PROs to perform an
initial review of the adequacy of risk HMO quality assurance plans in
1987, HCFA failed to require HMOs to submit their plans for review. 
Furthermore, when the PROs found deficiencies in HMO quality
assurance plans, HCFA did not require HMOs to correct them.  As a
result, HCFA could not be assured that HMOs were identifying and
correcting quality of care problems.  In commenting on this report,
HCFA stated that in 1987 it did not believe that PROs had the
expertise to perform reviews of HMOs' quality assurance plans. 
However, HCFA now believes the situation may have changed.  HCFA is
currently studying the possibility that PROs could play an active
role in monitoring Medicare HMO's quality assurance systems.  Second,
HCFA did not require risk HMOs to submit patient encounter data to
HCFA.  As a result, HCFA lacked adequate HMO utilization data and
other patient information that PROs could use to serve as the basis
for sampling HMO beneficiaries receiving hospital care or to identify
statistical patterns of care that may suggest underutilization or
inappropriate care.  Finally, HCFA failed to incorporate the results
of PRO review into its HMO qualification monitoring process.  As a
result, HCFA could not be assured that high-quality health care was
being provided to Medicare beneficiaries in risk HMOs.  This failure
was still an issue when we reviewed HCFA's oversight of HMOs serving
Medicare beneficiaries in 1995. 


--------------------
\30 PRO reviewers are usually nurses or other medical professionals. 

\31 However, if the care in question is so poor as to constitute a
gross and flagrant violation of the provider's duty to provide good
care, it is sent immediately to the medical review committee, which
determines if the PRO should recommend a sanction to the HHS Office
of Inspector General. 

\32 Medicare (GAO/HRD-91-48, Mar.  13, 1991). 


HCFA'S NEW STRATEGIES REFLECT
EXPERTS' VIEWS ON APPROPRIATE
QUALITY ASSURANCE APPROACHES
============================================================ Chapter 3

HCFA is substantially revising its quality assurance strategy to
reflect state-of-the-art quality assurance practices, such as
continuous quality improvement, outcomes measurement and
dissemination of performance results, that health care professionals
believe will more effectively improve quality of care.  HCFA's new
strategy, called the Health Care Quality Improvement Program, is
founded on the premise that HCFA should try to buy the best care
possible for Medicare beneficiaries and is generally consistent with
many of the elements of appropriate quality assurance strategies
cited by the health care experts we interviewed.  As a result, HCFA
officials believe that they will be able to improve the overall
quality of care for all Medicare beneficiaries. 

HCFA, however, is just now developing plans to provide additional
information to beneficiaries about plans' performances.  We believe
that this change is needed as HCFA revises its quality assurance
strategy.  The experts we interviewed believe that providing
information to help beneficiaries make sound purchasing decisions is
essential to a good quality assurance program. 


   EXPERTS' VIEWS ABOUT
   APPROPRIATE STRATEGIES FOR
   MEDICARE MANAGED CARE QUALITY
   ASSURANCE
---------------------------------------------------------- Chapter 3:1

When we asked the experts about their views on ensuring that quality
care is provided to Medicare beneficiaries through a variety of
managed care arrangements, they cited the following characteristics
for a federal quality assurance strategy: 

  The strategy should build on existing federal, state, and private
     efforts.  These efforts could include state initiatives such as
     those built on National Association of Insurance Commissioners'
     (NAIC) quality assurance and other model standards,\33 as well
     as existing private and federal systems, such as government
     certification and private accreditation programs, and the
     long-standing involvement and experience of PROs in collecting
     and evaluating quality assurance data. 

  The strategy should use many measures to evaluate care.  In
     addition to the ongoing quality assurance activities already
     discussed, steps should be taken to develop valid and reliable
     performance measures, including patient satisfaction surveys, in
     evaluating health care providers' performance.  The experts
     stressed the importance of outcome performance measures,
     recognizing that these measures are not yet fully developed. 
     Therefore, they suggested that other, more traditional,
     performance measures be used until consensus is reached on
     appropriate outcome measures.  Patient satisfaction surveys are
     becoming increasingly popular and important as a performance
     measurement tool.  Like large private-sector health care
     purchasers, the federal government could employ this strategy as
     one tool to measure provider performance.\34

  The strategy should encourage continuous quality improvement. 
     Experts view encouraging providers' continuous quality
     improvement activities as an important role for the federal
     government.  In this regard, they recognized the importance of
     external oversight programs designed to ensure that providers
     are continually assessing and improving the care they furnish. 
     Such oversight programs are an important tool for identifying
     previously undetected problems, providing management with
     constructive feedback, and assisting providers and plans to
     improve their health services.\35

  The strategy should make information about providers available to
     beneficiaries and others in a useful and understandable way.  A
     common theme expressed by the experts we interviewed was the
     need to provide understandable and reliable data on managed care
     organizations to beneficiaries to help them in their health care
     purchasing decisions.  Several told us that this information
     should be disseminated at the regional or local level because
     beneficiaries derive little benefit from national data. 

Although the experts we interviewed agreed on the broad strategies
needed for a comprehensive Medicare quality assurance program, they
were less unanimous in their views on implementing these strategies. 
For example, they expressed varying views on the most appropriate
performance data to collect, who should verify these data, and who
should be responsible for evaluating the data once they are collected
and verified.  Finally, experts expressed the view that federal
quality assurance strategies should be reexamined and enhanced for
the entire spectrum of Medicare providers--that is, managed care
organizations and fee-for-service providers. 


--------------------
\33 NAIC is a voluntary association consisting of the heads of the
insurance departments of the 50 states, the District of Columbia, and
four U.S.  territories.  Over the years, NAIC has developed about 200
model laws, regulations, and guidelines setting out the legal and
regulatory authorities it believes are necessary to effectively
regulate insurance.  The responsibility for requiring states to adopt
or implement NAIC's model policies falls to state legislatures. 
Recently, NAIC established a work group to develop health plan
accountability standards in the areas of provider credentialing,
utilization management, quality assessment and improvement, data
reporting, grievance procedures, managed care network adequacy and
contracting, accessibility, and confidentiality.  NAIC also is
undertaking the task of consolidating its regulations by drafting a
model uniform licensing act to cover all health insurers. 

\34 The Agency for Health Care Policy and Research (AHCPR), through a
contract with Research Triangle Institute (RTI), has designed a
survey to collect information on consumers' attitudes about access to
health care, use of specific services, perceptions about health
outcomes and quality of care, and satisfaction with care.  In
addition, AHCPR awarded 5-year cooperative agreements to three
consortia led by RTI, RAND, and Harvard Medical School to further
develop the knowledge base of consumer surveys and provide consumers,
and purchasers acting on their behalf, with valid, reliable, relevant
information for selecting health insurance plans. 

\35 For example, the Maine Medical Assessment Foundation gathers data
about the volume of specific services provided by physicians in
different parts of the state and then supplies this information to
Maine physicians.  According to the 1994 Physician Payment Review
Committee's Annual Report to Congress, Maine's system has resulted in
fewer back surgeries and hysterectomies. 


   HCFA IS REINVENTING ITS
   CERTIFICATION PROGRAM
---------------------------------------------------------- Chapter 3:2

As part of its Health Care Quality Improvement Program, HCFA intends
to reinvent the Medicare Provider Certification Program.  According
to a HCFA official, as outcome indicators become more valid,
reliable, and accepted by providers, outcome indicators will replace
current structure indicators in the certification process. 
Currently, HCFA is using outcome measures as the basis for its
nursing home certification decisions.  Furthermore, HCFA is
collecting data from home health agencies to construct outcome
measures.  HCFA is also developing outcome-oriented conditions of
participation for hospitals, which may be implemented in 1997. 


      HCFA'S NURSING HOME OUTCOME
      MEASURES
-------------------------------------------------------- Chapter 3:2.1

In 1987, the Congress passed legislation that extensively revised the
Medicare conditions of participation for skilled nursing
facilities.\36 These new conditions, renamed requirements, as
implemented by HCFA require a resident-centered survey emphasizing
review of the outcomes of the care actually furnished.  This review
is in addition to the review of the nursing home's performance in
relation to specific structure and outcome indicators. 

The resident-centered survey requirement is based upon the selection
of a case mix-stratified sample of residents performed in two phases. 
During the first phase, about 60 percent of the whole sample is
selected.  Included are residents who have special needs such as
those requiring considerable assistance with activities of daily
living, those who cannot be interviewed, and those who fit into the
specific area of focus selected for the survey.  In addition, the
sample should include some residents who (1) are new admissions; (2)
are at high risk of neglect and abuse because they have dementia, few
visitors, or are bedfast; (3) have difficulty communicating; (4) are
receiving hospice services; or (5) have other special circumstances. 
After the survey team has gained enough experience at the facility to
identify other areas of special concern, the remaining 40 percent of
the survey sample is selected, focusing on patients in these areas. 
The surveyors interview each of the selected residents and then
review their medical records to determine if the patient's needs have
been properly assessed, appropriate interventions have been
implemented, and the patient has been evaluated to determine the
intervention's effect. 

Also as a result of the 1987 legislation, on July 1, 1995, HCFA
implemented the Long Term Care Enforcement Regulation, a new set of
intermediate sanctions for the nursing home certification process. 
These give HCFA and the state agencies a broad range of remedies for
noncompliance with requirements short of termination from the
program.  These remedies range from such measures as enhanced state
monitoring and directed in-service training to civil monetary
penalties, temporary takeover of the facility's management, and
denial of payment for new admissions or even all residents.  HCFA
officials told us that they provided extensive training in the new
procedures and remedies to state agency personnel. 

HCFA is also developing a set of nursing home outcome indicators such
as the prevalence of decubitus ulcers and percentage of patients
whose capability for activities of daily living has declined over a
3-month period.  These indicators, now being measured in a five-state
demonstration project, stem from an expanded version of the minimum
data set mandated by law for use in all nursing facilities.\37 HCFA
eventually hopes to use the results of these indicators to permit
state agencies to focus increased resources on nursing homes showing
poor performance by decreasing the frequency of surveys for those
nursing homes with good performance.  HCFA officials also hope that
the nursing homes will use the data for continuous quality
improvement activities. 


--------------------
\36 Sections 4201(a)(3), 4202(a)(2), and 4203(a)(2) of OBRA 1987
(P.L.  100-203).  HCFA regulations implementing this statutory change
were effective in 1992. 

\37 The nursing home minimum data set was mandated by OBRA 1987.  It
contains the minimum assessment data items needed to comprehensively
and continuously evaluate the condition of a nursing home resident. 
These include information on the resident's cognitive status,
communication and vision patterns, mood and behavior, and activity
patterns, as well as more clinically oriented information such as
data on mobility, decubitus ulcers and other skin problems, disease
signs and symptoms, and nutritional status.  The data set is intended
to be used both as a tool for planning the care of individual
residents, quality monitoring, and payment classification systems. 


      HCFA IS DEVELOPING OUTCOME
      INDICATORS FOR OTHER HEALTH
      CARE SETTINGS
-------------------------------------------------------- Chapter 3:2.2

HCFA is also preparing new, outcome-oriented conditions of
participation for home health agencies, hospitals, and dialysis
facilities to be followed by new requirements for hospices.  In
conjunction with the new home health agency conditions of
participation, HCFA is developing indicators that reflect changes in
beneficiaries' functional and health status.  Examples of such
indicators are (1) percentage of patients showing improvement in
walking and (2) percentage of patients readmitted to an acute care
hospital.  As with nursing homes, HCFA officials hope to use these
indicators to determine the frequency with which different home
health agencies should be reviewed.  They also hope that the agencies
will use the indicators for continuous quality improvement projects. 

Additionally, HCFA is working with the Joint Commission, hospital
associations, and others to draft new, outcome-oriented hospital
conditions of participation.  HCFA officials told us that they hope
to publish these new conditions in the Federal Register for public
comment in 1996 and implement them during 1997. 

HCFA is also working with the Joint Commission and the American
Osteopathic Association (AOA) to modify its process for validating
these organizations' accreditation surveys.  The new process calls
for HCFA to conduct a more comprehensive evaluation of these
organizations' hospital accreditation programs, including standard
setting, training surveyors, conducting the survey, enforcing
actions, and remaining financially viable to ensure they can meet
their full responsibilities to protect patients and improve outcomes. 
Under this new process, state agency surveyors would observe the
Joint Commission or AOA surveyors to determine the accreditors'
ability to identify problems and analyze investigation results.  HCFA
officials told us that they are still working out the methodological
problems inherent in conducting simultaneous accreditation and
validation surveys.  HCFA expects to implement the new hospital
survey process in fiscal year 1997. 


   HCFA IS REENGINEERING THE PRO
   PROGRAM
---------------------------------------------------------- Chapter 3:3

Also as part of its Quality Improvement Program, HCFA is
reengineering the entire PRO program to incorporate continuous
quality improvement concepts.  By the end of 1995, random sample case
reviews--that until 1993 were the backbone of PRO review--had been
completely replaced by cooperative projects between the PROs and
providers.  Individual case review will continue for seven mandatory
categories\38 after implementation of the fifth round of PRO
contracts beginning in April 1996.\39 However, only two of these
categories appear to be primarily aimed at identifying providers
delivering poor care.  These categories are beneficiary complaints or
possible poor care discovered in the course of cooperative projects. 

Cooperative projects are implemented by mutual agreement between the
PROs and hospitals and the PROs and HMOs with Medicare contracts. 
Provider participation is voluntary.  HCFA officials indicated,
however, that they believe most hospitals and HMOs will welcome the
opportunity to collaborate with the PROs on projects with the
potential to improve the quality of care.  They do not believe that
provider noncooperation will be a significant problem.  However, HCFA
officials told us that if they have strong indications that a
hospital or HMO has significant quality of care problems and the
entity refuses to cooperate, HCFA can issue a letter terminating the
hospital's or HMO's Medicare participation for violating HCFA's
condition of participation to have an effective quality assurance
program. 

PROs will use population, diagnosis, and procedure-specific
utilization analysis of claims and clinical data as well as current
published scientific studies to identify potential projects in areas
that have clear opportunities to improve care.  Most projects are to
be jointly developed by the PRO and the provider and may involve
direct data collection to supplement the use of claims data.  HCFA
will direct other cooperative projects.  For example, the Cooperative
Cardiovascular Project requires PROs to work with hospitals to
improve care for Medicare beneficiaries hospitalized for heart
attacks.  HCFA developed a set of 11 process indicators based on an
existing clinical guideline and refined through experience in a
demonstration project involving collaboration between PROs and
hospitals in four states.\40 This demonstration project found that
guidelines are often not followed and that significant opportunities
for improvement exist.  Even among patients who were identified as
the best candidates for treatment, only 70 percent received
thrombolytic drugs, 45 percent received beta blockers at discharge,
and 77 to 83 percent received aspirin.  Hospitals reported that these
data were useful, and many of them committed to improving care.  The
PROs in the four pilot states are now returning to the hospitals to
assess progress and promote further improvement in cardiac care for
Medicare beneficiaries.  In March 1995, the Cooperative
Cardiovascular Project was extended nationwide.  Data on inpatient
treatment for heart attack are being collected in the remaining 46
states, and all PROs are expected to have collaborative projects with
hospitals to improve care for heart attack victims by mid-1996. 

Although PROs have the authority to review fee-for-service ambulatory
care, HCFA has been reluctant to venture into this area because
reviewing care at all U.S.  private physicians' offices would be
overwhelming.  Currently, except for ambulatory surgical procedures,
the only fee-for-service ambulatory review conducted is a pilot
project begun recently in three states.  In this project, PROs and
100 volunteer physicians in each state are cooperating to improve the
quality of care provided to patients with diabetes.  Concurrently,
PROs in five other states are working cooperatively with 23 HMOs on a
similar project.  Both the fee-for-service and HMO initiatives are
based on collecting information from medical records about 22
specific process and outcome performance measures such as the results
of important laboratory tests.\41


--------------------
\38 These categories are (1) allegations of transfer of unstabilized
emergency room patients to another hospital; (2) reviews for
unnecessary assistant surgeons for cataract surgery; (3) beneficiary
complaints of poor-quality care; (4) potential cases of grossly poor
care or unnecessary admissions identified during project data
collection; (5) instances of hospital requests for diagnosis related
group (DRG) adjustments that would result in higher reimbursement
(DRG validation only); (6) hospital- and managed care plan-issued
notices of noncoverage; and (7) all cases referred to PROs by HCFA,
the Office of Inspector General, the managed care appeals contractor,
intermediaries, carriers, or clinical data abstraction centers. 

\39 PRO contracts are renewed in groups.  The fifth contract round
will be fully implemented on October 1, 1996.  PRO contracts cover 3
years. 

\40 The guideline used was that published by the American College of
Cardiology and the American Heart Association in 1991. 

\41 The diabetes indicators were developed under contract with HCFA
by the Delmarva Foundation for Medical Care and the Harvard School of
Public Health with the assistance of expert panels.  These indicators
include data about eye and foot examinations, blood pressure
measurements, renal function, serum cholesterol and triglyceride
levels, and serum glucose levels. 


   DATA STANDARDIZATION IS A
   RECOGNIZED NEED
---------------------------------------------------------- Chapter 3:4

As part of the new program, HCFA officials are committed to working
collaboratively with providers to enhance data requirement
standardization by making HCFA requirements consistent with other
purchasers'.  As a result of these efforts, HCFA has already
implemented the minimum data set for nursing homes as previously
discussed and is developing minimum data sets for use in home health
care and managed care plans.  It is now focusing efforts on
standardizing data collection from managed care plans. 

HCFA officials have recognized that uniform and consistent plan data
are necessary for evaluating any managed care performance.  As a
result, HCFA is working with NCQA and others to develop a new version
of HEDIS that will include information applicable to the health care
needs of the Medicare population. 


   HCFA IS COLLABORATING WITH
   PRIVATE-SECTOR PURCHASERS
---------------------------------------------------------- Chapter 3:5

In June 1995, HCFA announced that it was joining a group of large
corporate purchasers of health care to form a new organization called
the Foundation for Accountability.  Among the many goals of this
organization is developing a new generation of quality performance
measures for health plans to provide purchasers and consumers with
relevant information for health care decisionmaking.  These measures
will include results of treatment both for a health system's entire
population and for sick individuals.\42

The Foundation also proposes to develop a common set of indicators to
enable consumers to compare plans and to understand a plan's benefit
structure and modes of treatment.  The Foundation will develop and
use standardized, performance-based quality and outcome measures that
emphasize patient ability to function normally in activities of daily
living and patient satisfaction with the care provided. 

Because the Foundation represents approximately 80 million insured
people, HCFA and the other Foundation members believe that health
plans will adopt these measures and supply the results to them, other
purchasers, and individual consumers.  According to a former HCFA
program official, joining this initiative will help to eliminate
duplication of quality assurance efforts. 


--------------------
\42 Linda Wolfe Keister, "With Health Care Costs Finally Moderating,
Employers' Focus Turns to Quality," Managed Care, Vol.  4, No.  10
(1995) (preprint downloaded from the Internet). 


   BENEFICIARY SATISFACTION
   INFORMATION
---------------------------------------------------------- Chapter 3:6

HCFA has acted to increase its knowledge about Medicare beneficiaries
and their reaction to its policies.  One major initiative to obtain
more information about the demographics, health status, access to
care, and satisfaction of Medicare beneficiaries is the annual
inclusion of specific questions about these issues in the Medicare
Current Beneficiary Survey.  This survey, begun in 1991, was
undertaken primarily to meet the needs of the HCFA Office of the
Actuary for comprehensive information on the use of care, costs, and
insurance coverage for the Medicare population.  It entails
conducting a telephone interview every 4 months with a representative
sample of 12,000 Medicare beneficiaries.  Sample members usually stay
in the survey for several years.\43

HCFA officials told us that they are planning a survey to collect
similar data from Medicare beneficiaries enrolled in HMOs.  They said
that they plan to have an outside contractor perform annual surveys
of a statistically valid sample of Medicare enrollees in every HMO
with a Medicare contract with HCFA.  The contractor will use a
standard survey and provide a consistent analysis of the information
received from the beneficiaries.  Data collected in this survey will
include information on member satisfaction, quality of care, and
access to services.  HCFA has not yet begun the contracting process,
however. 

HCFA officials told us that they intend to use the results of this
survey to monitor contracting HMOs as well as to translate the
resulting data into information that will be meaningful to
beneficiaries and others for making informed health care decisions. 
HCFA also intends to release the results of the surveys to the plans
for use in the plans' continuous quality improvement activities. 


--------------------
\43 The sample includes beneficiaries receiving care from either
fee-for-service or HMO providers.  However, because beneficiaries
belonging to HMOs constitute only about 10 percent of the Medicare
population, the number of such beneficiaries included in the sample
is relatively small.  In addition, a HCFA official told us that only
a very few of the beneficiary satisfaction questions in the survey
related to beneficiaries belonging to HMOs. 


   BENEFICIARY EDUCATION FOCUSES
   ON PERSONAL HEALTH, NOT
   PROVIDER OR PLAN INFORMATION
---------------------------------------------------------- Chapter 3:7

HCFA is conducting promotional campaigns intended to increase
Medicare beneficiaries' use of influenza immunizations and screening
mammographies.  Educational information about additional topics, such
as post-acute care alternatives and end-stage renal disease are being
developed. 

HCFA officials eventually plan to provide Medicare beneficiaries with
information that will help them choose providers.  Within a few
years, they expect to be able to report the characteristics and
results of key performance indicator data for nursing homes to
facilitate consumer comparison of facilities.  Producing these
reports is difficult, however, because it requires adjusting nursing
home comparisons for resident populations with differing care needs. 
Presenting the results of such a comparison in a clear enough way to
be useful to consumers will also be a complex task.  At best, it may
be several years before this initiative shows concrete results. 

HCFA officials also reported that they are planning to produce a
"Plan Comparability Chart," another initiative designed to provide
beneficiaries with information to compare Medicare HMOs and HMOs
versus fee-for-service arrangements.  However, this project appears
to be in its early stages.  In a recent report, we found that,
although HCFA does collect information that could be useful to
beneficiaries in discriminating among HMOs, it does not routinely
make such information available.\44 HCFA regularly reviews plan
performance and routinely collects and analyzes data on Medicare HMO
enrollment and disenrollment rates, Medicare appeals, beneficiary
complaints, plan financial condition, availability and access to
services, and marketing strategies.  However, HCFA does not make this
information routinely available to beneficiaries, nor does it plan to
do so.  In another recent report, we recommended that HCFA be
directed to routinely publish comparative data it collects on
Medicare HMOs and the results of its investigations and any findings
of noncompliance by HMOs.\45


--------------------
\44 Health Care (GAO/HEHS-95-201, Sept.  29, 1995). 

\45 Medicare (GAO/HEHS-95-155, Aug.  3, 1995). 


CONCLUSIONS AND AGENCY COMMENTS
============================================================ Chapter 4

HCFA's proposed changes to enhance its quality assurance programs are
generally consistent with the strategies expressed by the experts we
interviewed and the literature we reviewed on assessing quality in
the Medicare program.  These changes appear to be steps in the right
direction.  We have concerns, however, about HCFA's implementation of
its new quality assurance strategy and its plans and timetable for
providing information to beneficiaries. 

Our analysis of HCFA's previous quality assurance implementation
efforts raises concerns about whether HCFA will implement its new
comprehensive program to deal effectively with poorly performing
health care providers as well as improve all providers' performance. 
As the majority of experts we interviewed recommended, HCFA's Health
Care Quality Improvement Program is based on continuous quality
improvement.  HCFA plans, however--through its targeted medical
record review--to continue its efforts to identify providers who do
not meet accepted standards of practice.  But the number of targeted
reviews planned could be minimal.  The ability of HCFA's proposed
program to focus on dealing effectively with poorly performing
providers is unclear, and this is an area where HCFA has not
performed well in the past. 

HCFA's plans and timetable for implementing patient satisfaction
surveys and distributing comparative performance measurement
information lag behind those of some private-sector employers and
state agencies because HCFA does not believe it has useful
information to give beneficiaries.  We agree that HCFA should proceed
with due care before implementing programs that might mislead
beneficiaries about the quality of care they would receive in
different health care systems.  However, other responsible purchasers
have already proceeded with surveying their constituents to determine
their feelings about their health care and have published
satisfaction data and other performance information to help
individuals make purchasing decisions.  Those who received the
information say they found it useful and requested more data. 


   HCFA COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 4:1

The Administrator of the Health Care Financing Administration
disagrees with our concerns over how well HCFA will be able to
implement its new quality assurance initiative and its plans for
providing information to beneficiaries.  The Administrator also notes
that we do not mention HCFA's Long Term Care Enforcement Regulation
and provides detailed technical comments on our report (see app.  I). 


      GAO WORK ON HCFA'S QUALITY
      ASSURANCE ACTIVITIES
-------------------------------------------------------- Chapter 4:1.1

The Administrator said that our report inaccurately and unfairly
concludes that HCFA cannot implement comprehensive programs and deal
effectively with poorly performing health care providers.  He states
that our reports have presented an unbalanced view of HCFA's quality
assurance initiatives over the years, choosing to focus on negative
events in the past rather than HCFA's continuous improvements to its
quality monitoring.  For example, we have criticized HCFA in the past
for failing to enforce HMO quality assurance standards, citing the
example of a Florida HMO.  The Administrator notes that we do not
mention a HCFA investigation of this HMO in 1994 and 1995, the
deficiencies HCFA identified, and the corrective actions the plan
agreed to implement.  In addition, the Administrator disagrees with
our conclusion that HCFA should not rely totally on a continuous
quality improvement strategy since this could result in deemphasizing
the identification and correction of substandard providers.  He
argues that our report suggests that HCFA's resources should be
devoted to identifying substandard providers.  Furthermore, the
Administrator states that we cite but a few poor performers and
indicates that the only way to improve care for Medicare
beneficiaries is to terminate participation by these facilities. 

Our reports, as noted by the Administrator, have consistently
documented HCFA's failure to aggressively enforce HMO-related quality
assurance requirements.  We believe that the history of our work
raises reasonable concerns about how well HCFA will implement its
current quality assurance initiative and take action if providers are
not adequately improving their performance.  In several reports
prepared in the past decade covering both the provider certification
and HMO qualification programs, we have found that HCFA has often
failed to act firmly even when the provider is not making good faith
efforts or acceptable progress.  In our opinion, the events leading
up to and surrounding the 1994 investigation of the HMO mentioned by
the Administrator are an excellent example of HCFA's difficulties in
enforcing Medicare requirements for HMOs.  In January 1993, HCFA was
aware of findings from a 1992 special study performed by the Florida
PRO that showed serious quality problems at this HMO.  Despite this
awareness, HCFA did not begin to investigate the HMO's quality
assurance and utilization management practices until June 1994.  HCFA
approved a corrective action plan for this HMO in January 1995 and
found it in compliance in July 1995--more than 2-1/2 years after the
problem first surfaced. 

Despite the Administrator's statement, our report does not propose
devoting all of the program's resources to identifying substandard
providers.  Rather, we are concerned about how HCFA will balance its
use of continuous quality improvement with ways to deal effectively
with poorly performing providers.  Additionally, we do not believe,
as HCFA indicates, that the only way to improve care for Medicare
beneficiaries is to terminate providers from the program.  In some
instances, however, this may be HCFA's only recourse if the provider
repeatedly fails to take corrective action.  We have modified our
language in the report to clarify our position on this matter. 


      HCFA'S CONSUMER EDUCATION
      EFFORT
-------------------------------------------------------- Chapter 4:1.2

The Administrator also disagrees with what he characterizes as our
conclusion that HCFA has no immediate plans to provide beneficiaries
with health plan-specific information to help them in making health
care purchasing decisions.  Instead, he notes that HCFA recognizes
the need to provide information that is truly usable and informative. 
The Administrator adds that GAO does not go into any detail on the
usefulness of information issued by the private sector.  He argues
that at best such information is very sketchy and cannot be used to
make a managed care plan choice.  First, we agree that HCFA should
publish only useful information; however, we believe that some of the
information now being collected by HCFA qualifies as useful and could
be published and disseminated to Medicare beneficiaries.  This
includes information on HMO disenrollment rates and beneficiary
complaints.  In addition, HCFA could routinely release its HMO site
visit reports.  These reports contain information that might be
useful to beneficiaries, for example, how well the HMO is meeting
Medicare requirements such as maintaining an effective quality
assurance program and a Medicare appeals system.  The reports do not
normally contain provider-specific information that HCFA indicates
regulations prohibit it from releasing and are currently available to
the public only under Freedom of Information Act procedures.  We also
are convinced that HCFA beneficiaries could benefit from
private-sector strategies for collecting and disseminating
information about quality and value and have provided an additional
reference to support our belief that consumers would use this
information. 


      LONG TERM CARE ENFORCEMENT
      REGULATION
-------------------------------------------------------- Chapter 4:1.3

The Administrator also notes that our report does not mention the
Long Term Care Enforcement Regulation and the training efforts that
have occurred to enhance the effectiveness of both the enforcement
regulation and the long-term care survey process.  We have added a
description of HCFA's Long Term Care Enforcement Regulation to our
report. 

HCFA also made other detailed comments on specific portions of our
draft report.  We have considered these and modified our report where
appropriate. 




(See figure in printed edition.)APPENDIX I
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
============================================================ Chapter 4



(See figure in printed edition.)



(See figure in printed edition.)


EXPERTS INTERVIEWED
========================================================== Appendix II

The names and positions of the following experts as well as of the
organizations are as of May 1995, when we conducted these interviews. 


         AMERICAN ASSOCIATION OF
         PREFERRED PROVIDER
         ORGANIZATIONS
---------------------------------------------------- Appendix II:0.0.1

Lisa Sprague, Director of Legislative Affairs
Gordon B.  Wheeler, President and Chief Operating Officer


         AMERICAN ASSOCIATION OF
         RETIRED PERSONS
---------------------------------------------------- Appendix II:0.0.2

Mary Ellen Bliss, Regulatory Associate, Federal Affairs Department
Joyce Dubow, Senior Analyst, Public Policy Institute
Mary Jo Gibson, Senior Analyst, Public Policy Institute
Alan K.  Kaplan, Consultant to American Association of Retired
Persons


         AMERICAN GROUP PRACTICE
         ASSOCIATION
---------------------------------------------------- Appendix II:0.0.3

Julie A.  Sanderson-Austin, Director, Quality Management and Research


         AMERICAN HOSPITAL
         ASSOCIATION
---------------------------------------------------- Appendix II:0.0.4

Karen A.  Milgate, Associate Director, Policy Development
Ellen A.  Pryga, Director, Health Policy


         SOUTHERN CALIFORNIA
         EDISON
---------------------------------------------------- Appendix II:0.0.5

Pamela A.  Kroll, Health Plans Manager
Suzanne C.  Mercure, Manager of Benefits Administration


         COLORADO HOSPITAL
         ASSOCIATION
---------------------------------------------------- Appendix II:0.0.6

Larry H.  Wall, President


         CONSUMERFIRST
---------------------------------------------------- Appendix II:0.0.7

Clark E.  Kerr, President


         DEPARTMENT OF VETERANS
         AFFAIRS
---------------------------------------------------- Appendix II:0.0.8

Dr.  Galen L.  Barbour, Associate Chief Medical Director for Quality
Management, Office of Quality Management
M.  Scott Beck, Director, Office of Planning and Evaluation, Office
of Quality Management
Debby Walder, Director, Office of Risk Management, Office of Quality
Management


         FEDERATION OF AMERICAN
         HEALTH CARE SYSTEMS
---------------------------------------------------- Appendix II:0.0.9

Thomas A.  Scully, President and Chief Executive Officer


         GOOD SAMARITAN HEALTH
         SYSTEM
--------------------------------------------------- Appendix II:0.0.10

Dr.  Molly J.  Coye, Senior Vice President, Clinical Operations


         GROUP HEALTH ASSOCIATION
         OF AMERICA
--------------------------------------------------- Appendix II:0.0.11

Kelli Back, Senior Policy Associate, Government Affairs
Carmella Bocchino, Director of Medical Affairs
Julie Goon, Director of Legislative Affairs
Candace Schaller, Director of Policy, Government Affairs


         GROUP HEALTH COOPERATIVE
         OF PUGET SOUND
--------------------------------------------------- Appendix II:0.0.12

Kathleen Cromp, Director of Quality of Care Assessment


         HARVARD SCHOOL OF PUBLIC
         HEALTH
--------------------------------------------------- Appendix II:0.0.13

Dr.  R.  Heather Palmer, Director, Center for Quality of Care
Research and Education


         HEALTH CARE FINANCING
         ADMINISTRATION
--------------------------------------------------- Appendix II:0.0.14

Gary Bailey, Team Leader, Beneficiary Access and Education Team,
Office of Managed Care
Paul D.  Elstein, Team Member, Quality and Performance Standards
Team, Office of Managed Care
Dr.  Stephen Jencks, Senior Clinical Advisor, Health Standards and
Quality Bureau
Tracy L.  Jensen, Legislative Liaison, Office of Managed Care
Jean D.  LeMasurier, Team Leader, Program, Policy and Improvement
Team, Office of Managed Care


         HEALTH PAGES MAGAZINE
--------------------------------------------------- Appendix II:0.0.15

Carol Cronin, Senior Vice President


         HENRY FORD HEALTH SYSTEM
--------------------------------------------------- Appendix II:0.0.16

Dr.  David R.  Nerenz, Director for Center of Health System Studies


         JACKSON HOLE GROUP
--------------------------------------------------- Appendix II:0.0.17

Dr.  Sarah Purdy, Health Policy Analyst


         JOHN DEERE HEALTH CARE,
         INC. 
--------------------------------------------------- Appendix II:0.0.18

Dick Van Bell, President
Geri Zimmerman, Director of Quality Management Programs


         JOINT COMMISSION ON
         ACCREDITATION OF
         HEALTHCARE ORGANIZATIONS
--------------------------------------------------- Appendix II:0.0.19

Dr.  Paul M.  Schyve, Senior Vice President
Margaret VanAmringe, Associate Director, Government Relations


         MIDWEST BUSINESS GROUP ON
         HEALTH
--------------------------------------------------- Appendix II:0.0.20

James D.  Mortimer, President


         NATIONAL CAPITOL
         PREFERRED PROVIDER
         ORGANIZATION
--------------------------------------------------- Appendix II:0.0.21

Dr.  Robert Berenson, Medical Advisor


         NATIONAL COMMITTEE FOR
         QUALITY ASSURANCE
--------------------------------------------------- Appendix II:0.0.22

Steven Lamb, Director of Government Relations
Margaret E.  O'Kane, President


         PARK NICOLLET MEDICAL
         FOUNDATION
--------------------------------------------------- Appendix II:0.0.23

Dr.  Jinnet Fowles, Vice President, Research and Development


         PHYSICIAN PAYMENT REVIEW
         COMMISSION
--------------------------------------------------- Appendix II:0.0.24

David C.  Colby, Principal Policy Analyst


         PRUDENTIAL CENTER FOR
         HEALTH CARE RESEARCH
--------------------------------------------------- Appendix II:0.0.25

Dr.  William L.  Roper, President


         THE RAND CORPORATION
--------------------------------------------------- Appendix II:0.0.26

Dr.  Elizabeth A.  McGlynn, Health Policy Analyst, Health Sciences
Program


         STATE OF FLORIDA
--------------------------------------------------- Appendix II:0.0.27

Randy Mutter, Administrator, Research and Analysis Section, Agency
for Health Care Administration


         STATE OF MICHIGAN
--------------------------------------------------- Appendix II:0.0.28

Janet Olszewski, Chief, Division of Managed Care, Michigan Department
of Public Health


         THOMAS JEFFERSON
         UNIVERSITY HOSPITAL
--------------------------------------------------- Appendix II:0.0.29

Dr.  Leona E.  Markson, Associate Director, Clinical Outcomes
Research
Dr.  David B.  Nash, Director, Office of Health Policy and Clinical
Outcomes


         UNIVA HEALTH NETWORK
--------------------------------------------------- Appendix II:0.0.30

Dr.  William Jesse, President and Chief Executive Officer


         UTILIZATION REVIEW AND
         ACCREDITATION COMMISSION
--------------------------------------------------- Appendix II:0.0.31

Randall H.  H.  Madry, Executive Director


         WASHINGTON BUSINESS GROUP
         ON HEALTH
--------------------------------------------------- Appendix II:0.0.32

Sally Coberly, Director


         WISCONSIN PEER REVIEW
         ORGANIZATION
--------------------------------------------------- Appendix II:0.0.33

Dr.  Jay A.  Gold, Principal Clinical Coordinator


ACCREDITING ORGANIZATIONS
========================================================= Appendix III



                              Table III.1
                
                 Organizations Whose Accreditation HCFA
                  Deems to Be Adequate Assurance That
                   Providers Meet HCFA Conditions of
                             Participation

Type of provider                    Accrediting organization
----------------------------------  ----------------------------------
Hospitals                           Joint Commission on Accreditation
                                    of Healthcare Organizations
                                    American Osteopathic Association

Home health agencies                Joint Commission on Accreditation
                                    of Healthcare Organizations
                                    Community Health Accreditation
                                    Program

Laboratories under the Clinical     Joint Commission on Accreditation
Laboratories Improvement Act        of Healthcare Organizations
                                    College of American Pathologists
                                    American Society for
                                    Histocompatability and
                                    Immunogenetics
                                    American Association of Blood
                                    Banks American Osteopathic
                                    Association
----------------------------------------------------------------------


                              Table III.2
                
                      Organizations That Accredit
                 Institutional Health Care Providers or
                         Units Within Providers

Accrediting organization            Type of provider accredited
----------------------------------  ----------------------------------
Joint Commission on Accreditation   Hospitals, skilled nursing
of Healthcare Organizations         facilities, home health agencies,
                                    health networks, and others

American Osteopathic Association    Hospitals and laboratories

National Committee on Quality       Managed care plans
Assurance

Commission on Accreditation of      Rehabilitation facilities
Rehabilitation Facilities

Commission on Office Laboratory     Physician office laboratories
Accreditation

College of American Pathologists    Laboratories

American Association of Ambulatory  Ambulatory health centers and
Health Care                         ambulatory surgical centers

American Society of                 Laboratories performing tissue-
Histocompatibility and Immunology   typing and related tests

American College of Surgeons        Trauma systems

American Speech and Hearing         Speech and hearing programs
Association

Commission on Accreditation of      Freestanding birthing centers
Free Standing Birthing Centers

National Commission on              Health units in correctional
Correctional Health Care            facilities

American Association of Blood       Laboratories
Banks

Utilization Review Accreditation    Freestanding utilization review
Commission                          programs and utilization review
                                    programs in HMOs and preferred
                                    provider organizations (PPO)

American College of Radiology       Diagnostic and therapeutic
                                    radiology units in all settings

Community Health Accreditation      Home health agencies
Program

American Accreditation Program,     PPOs
Inc.
----------------------------------------------------------------------



RELATED GAO PRODUCTS
============================================================ Chapter 0

Health Care:  Employers and Individual Consumers Want Additional
Information on Quality (GAO/HEHS-95-201, Sept.  29, 1995). 

Medicare:  Increased HMO Oversight Could Improve Quality and Access
to Care (GAO/HEHS-95-155, Aug.  3, 1995). 

Medicare:  Enhancing Health Care Quality Assurance
(GAO/T-HEHS-95-224, July 27, 1995). 

Community Health Centers:  Challenges in Transitioning to Prepaid
Managed Care (GAO/HEHS-95-138, May 4, 1995); testimony on the same
topic (GAO/T-HEHS-95-143, May 4, 1995). 

Medicare:  Opportunities Are Available to Apply Managed Care
Strategies (GAO/T-HEHS-95-81, Feb.  10, 1995). 

Health Care Reform:  "Report Cards" Are Useful but Significant Issues
Need to Be Addressed (GAO/HEHS-94-219, Sept.  29, 1994). 

Home Health Care:  HCFA Properly Evaluated JCAHO's Ability to Survey
Home Health Agencies (GAO/HRD-93-33, Oct.  26, 1992). 

Home Health Care:  HCFA Evaluation of Community Health Accreditation
Program Inadequate (GAO/HRD-92-93, Apr.  20, 1992). 

Medicare:  HCFA Needs to Take Stronger Actions Against HMOs Violating
Federal Standards (GAO/HRD-92-11, Nov.  12, 1991). 

Health Care:  Actions to Terminate Problem Hospitals From Medicare
Are Inadequate (GAO/HRD-91-54, Sept.  5, 1991). 

Medicare:  PRO Review Does Not Ensure Quality of Care Provided by
Risk HMOs (GAO/HRD-91-48, Mar.  13, 1991). 

Medicare:  Physician Incentive Payments by Prepaid Health Plans Could
Lower Quality of Care (GAO/HRD-89-29, Dec.  12, 1988). 

Medicare:  Experience Shows Ways to Improve Oversight of Health
Maintenance Organizations (GAO/HRD-88-73, Aug.  17, 1988). 

Medicare:  Issues Raised by Florida Health Maintenance Organization
Demonstrations (GAO/HRD-86-97, July 16, 1986). 


*** End of document. ***