Accreditors Blamed for Overlooking Problems

While officials say no information flows between the two groups, tax returns show that a substantial amount of money does change hands.

In the past three years, JCR has paid its parent about $10.5 million in management fees and $867,000 in royalties. And according to its 2003 tax return, JCR owes the joint commission nearly $8.4 million. In addition, the affiliate helps to underwrite two money-losing joint ventures of the commission.

O'Leary said the joint commission has been careful to properly isolate its potentially conflicting missions.

"From a technical standpoint, I don't believe we can be much purer," O'Leary said. "But we still have to deal with perception issues and it's problematic."

States Pull Out

Medicare performs some spot checks on the joint commission's work to make sure the accredited hospitals meet federal standards. But the number of validation surveys has dwindled in recent years because of a lack of funding.

Medicare used to review 5 percent of all hospital accreditation surveys annually, but that was slashed to 1 percent in 2003. This year, Medicare had again hoped to check 5 percent but was forced to scale back to 2 percent because of budget constraints.

A few states have opted out of the commission's accreditation program in recent years because of concerns about accountability. In 2001, Pennsylvania regulators decided to survey their own hospitals again after relying for years on the private group.

Dick Lee, state deputy secretary of health for quality assurance, said his department "found serious problems" with the commission's inspections.

"It was true across hospitals," he said. "We got a complaint one week after [the joint commission] had gone into a hospital and done an inspection."

Maryland regulators used to conduct their own hospital inspections until a wave of deregulation swept the state in the 1980s and state legislators agreed to accept joint commission accreditation for licensing purposes. According to Carol Benner, director of the state Office of Health Care Quality, Maryland "had no authority" over the joint commission: "We couldn't tell them what to look for in their surveys, and they didn't consult us."

The flaws in the state's inspection program were exposed by the massive problems in the laboratory at Maryland General Hospital last year.

The joint commission had given the hospital its approval in 2001 and 2004. Another private group -- the College of American Pathologists, or CAP -- had also awarded the hospital's laboratory its highest distinction in 2003, shortly before allegations of faulty equipment and shoddy testing became public. (Maryland General has since made numerous changes and is once again fully accredited.)

The state regulators and private accrediting groups blamed one another for missing the problems. The joint commission said it relied on CAP to inspect the laboratory. CAP officials said whistle-blowers at the hospital didn't share critical information with them. Benner said CAP didn't give the state copies of its surveys.

"There was no relationship between CAP and this office. That's just the way it was," Benner said.

"Everyone in this case failed: the state, the federal government, the joint commission and CAP," she said. "It's not pretty."