Better Review Urged For Medicare Complaints

By Gilbert M. Gaul
Washington Post Staff Writer
Friday, March 10, 2006

Private contractors hired by Medicare to improve quality and investigate complaints have failed to promote patients' rights, and face conflicts of interest that may lead them to favor doctors and hospitals over beneficiaries, a federal advisory group reported yesterday.

The Institute of Medicine, which is the government's key consultant on health care policy, concluded that while Quality Improvement Organizations play an important role in health care, responsibility for investigating patient complaints should be removed from them and shifted to other organizations.

"The evidence indicates that QIOs have not publicized beneficiary rights effectively and have issued fewer provider sanctions in recent years," the group said in its report. "This may be the result of inherent conflicts of interest: QIOs consider providers, not beneficiaries, to be their primary clients, and a QIO may not want to antagonize the providers" with which it works.

Medicare pays 53 QIOs about $300 million a year to measure quality, work with hospitals and physicians to improve care, and to investigate patient complaints. There are contractors in every state plus one each in the District, Puerto Rico and the U.S. Virgin Islands. Most are set up as nonprofit organizations.

The 283-page report included recommendations that would dramatically alter the work and operations of the quality contractors if adopted by Congress and Medicare officials. It called for sharply increased oversight and more competition, less secrecy in the QIO operations and major revision of the governance of the physician-dominated groups, such as putting more consumers on their boards and making public the compensation paid to directors.

Spokesmen for Medicare and the QIOs said they agree with many of the findings. But the American Health Quality Association, which represents the QIOs, said that investigating complaints should continue to be an important task of QIOs and it plans to press its case with Congress and other stakeholders.

The report said the QIOs should have a more sharply focused role as providers of technical assistance to hospitals and other providers, especially as the health care market shifts to more public reporting of outcomes and ties insurance payments to the quality of care.

It concluded that the groups can help improve care for the 43 million elderly and disabled Medicare beneficiaries but that currently there is no "conclusive evidence" measuring the contractors' impact. The panel called on Medicare officials to conduct more "rigorous" and independent studies of the QIOs' work and to use those findings "to guide future decisions about the program."

A Washington Post investigation in July found that QIOs place a low priority on patient complaints, investigating just 3,100 complaints from Medicare beneficiaries in 2004. Even then, complaints are rarely upheld and sanctions are few.

When a complaint is confirmed, the results are secret, leaving patients and families in the dark. In addition, The Post documented lavish salaries and perks paid to some QIO executives and board members, including a nonprofit contractor in New Jersey that paid its trustees more than $500,000 in 2003.

The Institute of Medicine study, part of a series requested by Congress to examine ways to improve quality and improve how insurers pay for care, singled out the contractors' boards as one area needing substantial change. Many of the boards are "heavily dominated by physicians" and have only a single consumer, it said. Moreover, many QIO boards have no finance or audit committees, and only eight reported having a strategic planning committee.

"Many of the boards are frozen in the 1960s or 1970s, is one way to put it," said Stephen M. Shortell, dean of the School of Public Health at the University of California at Berkeley and chairman of the panel. "We feel quite strongly about this and are calling for the upgrading or modernization. We would like to see more nurses, pharmacists . . . and consumers."

Some of the panel's recommendations will require action by Congress. For example, QIOs are prohibited by a 20-year-old law from sharing the details of their investigations with patients without first obtaining the approval of the doctors involved. Legislation may also be needed to release the names and results of hospitals and doctors who work with the QIOs.

The panel's recommendation to shift patient complaint investigations drew a sharp response from the QIOs. Jonathan Sugarman, past president of the American Health Quality Association, said the recommendation "deserves substantially more analysis" and it was not "totally inconsistent" for the QIOs to have medical providers and patients as clients. Earlier this week, the trade association called for an overhaul of the complaint process, acknowledging that it is broken.

Barry Straube, acting chief medical officer for Medicare, said the giant health insurer found the panel's recommendation to shift the reviews to a few national or regional contracts "a promising approach" that the agency plans to evaluate promptly.

© 2006 The Washington Post Company