CHRONIC CONDITION Medicare's Secretive Contractors

Once Health Regulators, Now Partners

David Shipp was forced to sue Medicare officials to find out why his wife died. He won, but they refused to provide details.
David Shipp was forced to sue Medicare officials to find out why his wife died. He won, but they refused to provide details. (By David R. Lutman For The Washington Post)

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By Gilbert M. Gaul
Washington Post Staff Writer
Tuesday, July 26, 2005

Last of three parts

For four years the federal government was David Shipp's steadfast opponent, refusing to answer the former textbook salesman's questions and rolling out its attorneys to block his attempts to obtain information.

Shipp wasn't seeking classified secrets. He was simply trying to find out why his wife of 49 years had died.

In December 1999, Shipp filed a complaint with Medicare suggesting that doctors had misdiagnosed his wife's colon cancer. The complaint landed with Health Care Excel, a private group under contract with Medicare to ensure that patients receive quality treatment.

Instead of helping the Louisville man, the nonprofit stonewalled him. Even if it confirmed his complaint, the group told Shipp, under Medicare's rules it could not reveal the results of its review.

A stunned Shipp headed to federal court, where in August 2003 he won the right to an answer. But even then Medicare and its contractor remained stingy with details. In a brief form letter, they acknowledged that Doris Ann Shipp had received substandard care, but they would not say what actions, if any, had been taken against the doctors.

"It was like I was the enemy," said the lanky 75-year-old with a plume of snowy white hair. "Here I thought the government would be on my side."

Shipp's lawsuit provided a rare glimpse inside a little-known network of private contractors called Quality Improvement Organizations, or QIOs. Each year, Medicare pays nearly $300 million to 53 businesses such as Indiana-based Health Care Excel to measure quality, work with hospitals and doctors to improve care, and investigate patient complaints.

The case illustrates how the private groups sometimes play a conflicted and controversial role. By law, QIOs, which are dominated by doctors and health executives, operate in secrecy with little oversight or accountability. Consumers say they are difficult to contact and rarely uphold complaints. At the same time, the number of sanctions QIOs recommend against doctors each year has dwindled from hundreds to a few.

Today, QIOs are also leading proponents of a new brand of regulation that favors cooperation over discipline. QIOs increasingly view themselves not as regulators but as partners of hospitals, nursing homes and doctors, working to improve care. Some have leveraged their positions to become highly profitable businesses, paying generous salaries and perks to executives and board members.

"One of the problems with QIOs is that they are reluctant to do anything that ruins their relationships with providers," said Robert A. Berenson, a Medicare official in the Clinton administration.

"They've made this huge move from being inspectors to being collaborators. It's a blame-free environment," Berenson said. "I'm sympathetic, but . . . you need inspectors."


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© 2005 The Washington Post Company

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