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12
Protection of Medicare Beneficiaries
and Program Integrity
CHAPTER SUMMARY
This chapter discusses the case review activities that were under-
taken by Quality Improvement Organizations (QIOs) during the
7th scope of work (SOW), including the categories and the types of
reviews, the review process, and use of mediation, as well as the
activities of the related QIO Support Centers (QIOSCs). Next, the
chapter outlines the evaluation methodologies used for case review
activities during the 7th SOW and the general case review activities
of the 8th SOW, followed by an extensive discussion of the Hospi-
tal Payment Monitoring System in both the 7th and the 8th SOWs.
Finally, the chapter describes the impacts of the case review activi-
ties in the 7th SOW.
During the 7th SOW, Quality Improvement Organizations (QIOs) per-
formed tasks to protect both the beneficiaries of the Medicare program and
the Medicare Trust Fund (CMS, 2002, 2004a,b). Beneficiary protection
involved the review of all complaints about the quality of care or appeals of
noncoverage decisions filed by Medicare beneficiaries or their representa-
tives. These complaints and appeals could be submitted in writing or by
telephone. Each complaint had to be reviewed for quality-of-care concerns,
including the appropriateness of services and the appropriateness of the
setting. The QIO program introduced mediation during the 7th scope of
work (SOW) to replace the traditional case review process for certain ben-
eficiary complaints. Until recently, the complainants received no informa-
tion about the outcomes of their complaints. Today, the complainants re-
ceive answers concerning the confirmation of a presence or an absence of
quality concerns but are not informed about the specific actions taken, if
any are taken. If mediation is involved, the complainant may be aware of or
involved in any subsequent actions.
297
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298 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
QIOs helped maintain the integrity of the Medicare program by per-
forming specific reviews related to utilization concerns, including hospital
admissions and coding, to ensure that the reimbursed services were neces-
sary and appropriate. Earlier cycles of the QIO program focused on case
review, but this was primarily carried out only in the hospital inpatient
setting and for fewer categories of cases. The numbers of review categories
have continued to increase over the life of the QIO program, including
through the 7th and the 8th SOWs.
CASE REVIEW ACTIVITIES IN THE 7TH SOW
In the 7th SOW, cases for review were generally brought to the atten-
tion of QIOs from outside sources, such as Medicare beneficiaries, interme-
diaries, carriers, or subcontractors; the Centers for Medicare and Medicaid
Services (CMS) or the Clinical Data Abstraction Centers (CDACs) (dis-
cussed later in this chapter and in Chapter 13); and the Office of the Inspec-
tor General of the U.S. Department of Health and Human Services (DHHS)
(CMS, 2002, 2004b). The Project Officer submitted each case referred by
an outside agency to CMS's Central Office for approval before the QIO
could conduct the review. In the 7th SOW, the QIOs performed case re-
views under Tasks 3a and 3c. Task 3a--Beneficiary Complaint Response
Program--required the investigation of all beneficiary complaints related to
quality of care and allowed QIOs to offer mediation when appropriate.
During this contract period, the QIO program adopted a new approach to
the complaints process, in which a single case manager worked with the
complainant throughout the entire process. In Task 3c--Other Beneficiary
Protection Activities--QIOs performed all other case reviews (aside from
those stemming from beneficiary complaints). Several different categories
of reviews and types of review processes exist, and CMS has mandated
specific requirements for each category and type of review in great detail in
the Quality Improvement Organization Manual (CMS, 2002, 2004b). Ac-
tivities related to Medicare Trust Funds protection also included the Hospi-
tal Payment Monitoring Program (HPMP) (Task 3b), in which QIOs
worked to monitor and reduce the number of payments made in error in the
hospital setting (HPMP is also discussed later in this chapter).
The type of review that a QIO conducted was based on the triggering
event or category of review, as discussed below. Table 12.1 lists some of the
most common types of reviews and the categories for which they were con-
ducted. These include reviews related to beneficiary protection as well as
protection of the Medicare Trust Fund.
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 299
TABLE 12.1 Types of Reviews for Each Mandated Category of Review
Category of Review Type of Review Provider Setting
Beneficiary complaints Quality review All settings except nursing
homes (which are
addressed by the state
survey agency)
Potential EMTALA Quality review Hospitals
violations (patient
dumping)
Assistants at cataract surgery Utilization review (medical Any setting, but not for
necessity of a physician's Medicare managed care
assistant at cataract cases
surgery)
Hospital-issued notices of Utilization review (medical Hospitals
noncoverage (HINNs) necessity of admission,
length-of-stay review, and
appropriateness of
noncoverage notice)
Notice of discharge and Utilization review (medical Hospitals
Medicare appeal rights necessity of admission,
(NODMARs) length-of-stay review, and
appropriateness of
noncoverage notice)
Fast-track appeals Utilization review (medical Skilled nursing facilities,
necessity of admission, home health agencies, and
length-of-stay review, and comprehensive outpatient
appropriateness of rehabilitation facilities
noncoverage notice)
Hospital-requested higher- DRG validation and Prospective payment system
weighted DRG adjustments utilization review (medical hospitals
necessity of admission)
Potential instances of gross Quality review All settings
or flagrant violations of
professionally recognized
standards of care
Referrals from CDACs as DRG validation and Acute care hospitals
part of HPMP utilization review (medical
necessity of admission and
any procedure performed)
NOTE: EMTALA = Emergency Medical Treatment and Labor Act; DRG = diagnosis-
related group
SOURCES: CMS (2004b) and Northeast Health Care Quality Foundation (2005).
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300 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
Categories of Case Reviews
The following are the required categories of case review that QIOs per-
formed (CMS, 2002, 2004b):
1. Beneficiary complaints. Beneficiary complaints underwent either a
traditional review process or the new option of mediation. Both processes
are discussed later in this chapter.
2. Alleged antidumping violations of the Emergency Medical Treatment
and Labor Act (EMTALA).1 The QIOs did not determine or resolve
EMTALA violations. Instead, the QIOs functioned to answer specific ques-
tions about screening, stabilization, and transfer. The QIOs performed ei-
ther 5-day or 60-day reviews. The ultimate decision about EMTALA viola-
tions rested with the CMS Regional Office or the Office of the Inspector
General of DHHS.
3. Requests for assistants at cataract surgery for fee-for-service benefi-
ciaries. Ophthalmologists had to obtain preapprovals from the QIO for
specific procedure codes that allow the use of and billing for assistants dur-
ing cataract surgery.
4. Hospital-issued notices of noncoverage (HINNs). HINNs apply to
services determined by the hospital to be medically unnecessary, custodial
in nature, or provided in an inappropriate setting. Hospitals issue HINNs
to beneficiaries or their representatives if the hospital determines that the
current or future care of the beneficiary will not be covered by Medicare.
The hospital is not required to acquire concurrence from the attending
physician. QIO review of HINNs was performed upon the request of the
beneficiary or his or her representative who wanted to appeal the notice
and receive the services identified by the hospital as unnecessary or in-
appropriate.
5. Notices of discharge and Medicare appeal rights (NODMARs).
NODMARs are delivered to Medicare managed care beneficiaries by a
managed care organization or by a hospital on behalf of the managed care
organization. NODMARs notify beneficiaries that their current hospital
services will be terminated. Unlike HINNs, NODMARs can be issued only
with the agreement of the beneficiary's treating physician. QIOs reviewed
NODMARs immediately upon request of the beneficiary or his or her rep-
resentative.
6. Medicare+Choice fast-track appeals. Medicare+Choice fast-track
appeals were conducted at the beneficiary's request when the beneficiary
1Passed in 1986 as section 9121 of the Consolidated Omnibus Reconciliation Act (COBRA)
of 1985 (P.L. 99-272).
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 301
received notice from the managed care organization that the services pro-
vided by a skilled nursing facility, a home health agency, or a comprehen-
sive outpatient rehabilitation facility were being terminated. The managed
care organization must issue a notice of Medicare noncoverage (also re-
ferred to as an advanced notice) at least 2 days or two visits before the
services are to end. Upon receipt of the medical records, QIOs determined
within 48 hours whether the services would be continued or terminated.
These reviews, which were new in the 7th SOW, are also known as "Grijalva
reviews," based on Grijalva v. Shalala, a class action lawsuit that chal-
lenged the managed care appeals process (CMS, 2005a).
7. Hospital requests for adjustments to a higher-weighted diagnosis-
related group (DRG).2 The QIOs performed these reviews to ensure that
the diagnosis, the related clinical procedures performed, discharge status,
and medical record all matched. An exemption existed for hospitals waived
from the prospective payment system, in excluded geographic areas, or in
the case of a beneficiary in managed care.
8. Cases of potential gross and flagrant violations or substantial viola-
tions in many cases.
9. HPMP is a specialized category of case review that is discussed in
detail later in this chapter.
If a new quality concern arose during the review of a case in any one of
these categories, then the QIO had to perform a separate quality review, in
addition to the original review (CMS, 2002, 2004a,b). For example, from
October 2002 to June 2005, the QIOs reviewed 1,950 records for EMTALA
5-day reviews and 1,196 records for EMTALA 60-day reviews (personal
communication, J. Kelly, CMS, August 30, 2005). As a result, the QIOs
conducted 34 reviews of the quality of care for concerns that arose during
EMTALA reviews.
Types of Reviews
QIOs evaluated cases using three general types of review: quality re-
views, utilization reviews, and DRG validation reviews (CMS, 2004b). In
general, the QIOs performed quality reviews for cases related to beneficiary
protection and performed utilization reviews or DRG validation reviews
for cases related to program integrity.
2Diagnosis-related groups are codes that link diagnoses and procedures to a level of reim-
bursement.
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302 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
Quality Reviews
Quality reviews assess whether the health care delivered to beneficiaries
met professionally recognized standards, was provided economically, was
medically necessary, and was supported by adequate documentation. QIOs
performed quality reviews for cases of both fee-for-service and managed
care beneficiaries, but managed care cases were assessed only on the basis
of the appropriateness of the services provided and the setting in which they
were provided and not on the basis of medical necessity. Quality review
cases apply to services provided by many different types of providers, such
as hospitals, home health agencies, and skilled nursing facilities (CMS, 2002,
2004b).
Utilization Reviews
Utilization reviews cover the medical necessity and the reasonableness
of services provided, as well as the appropriateness of the care setting. QIOs
did not conduct utilization reviews for services provided to beneficiaries in
managed care. Any of the four reviews listed below might be conducted
under the umbrella of utilization review (CMS, 2002, 2004b):
· Admission or discharge reviews,
· Invasive procedure reviews,
· Length-of-stay reviews, and
· Coverage reviews.
DRG Validation Review
The QIOs performed DRG validation reviews for prospective payment
system hospital cases, including hospital-requested higher-weighted DRG
assignments and cases in the HPMP (Task 3b of both the 7th and the 8th
SOWs). The QIO did this type of review to ensure that the claims codes
matched the information in the medical record. The reviewers examined
diagnoses, the clinical procedures performed, and discharge status to vali-
date the claim (CMS, 2002, 2004b).
Other Types of Reviews
In addition to quality, utilization, and DRG validation reviews, QIOs
conducted additional specific case reviews on a more limited basis, as the
need required. The following types of reviews were conducted only in con-
junction with one of the types of reviews mentioned above (CMS, 2002,
2004b):
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 303
· Outlier reviews,
· Limitation on liability determinations,
· Readmission reviews,
· Transfer reviews,
· Circumvention of prospective payment system reviews, and
· On-site reviews.
Review Process
QIOs conducted the reviews described above with the assistance of con-
tracted reviewers who met specified requirements (CMS, 2004b). At the
initial level of review, nonphysician reviewers could be used if they had the
necessary clinical education and the relevant experience to screen medical
records. At least one registered records administrator or accredited records
technician had to oversee the process. After the initial review, only physi-
cians could be used for the remainder of the review process and generally
had to meet the following requirements:
· Have authorization to practice medicine, surgery, osteopathy, den-
tistry, podiatry, or optometry;
· Be in active practice;
· Have the same medical license (as well as be in the same specialty) as
the physician under review; and
· Be practicing in the same setting and state as the physician under
review (if possible).
In general, the case reviews followed the structure outlined below, except
for cases of potential gross and flagrant violations, for which a different,
expedited process was used because of possible concerns of immediate dan-
ger. Similarly, HINNs and NODMARs had shorter processes because of
time constraints (Figure 12.1).
Nonphysician Review
The nonphysician reviewer performs a first screening review, based on
screening tools and professional expertise, to determine if:
· There is adequate documentation in the medical record;
· The case should be referred to a physician reviewer; and
· The medical services and items were provided economically and only
when medically necessary, were provided up to professionally recognized
standards, and were supported by evidence and documentation.
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304
Judge.
Law
on on
QIO
logs logs
reviews case notifies and decision End
SDPS SDPS
QIO QIO
ALJ ALJ of decision decision
CMS
Days*- - Administrative
C re
30 for =
provider/ Days**- makes reviews-
C
decision re case receives review
30
practitioner
ALJ QIO
Notify ALJ
QIO QIO request
prepares for notifies
file
QIO QIO
Review provider/practitioner
intermediary/beneficiary System;
Openings- for Days*-
Re Days**- C
prepares Letter Days*-
W 30
receives C
End
30 60
QIO request
Acknowledgment QIO reconsideration reconsideration
on Provider/practitioner beneficiary/request Processing
logs Yes
Yes
Yes SDPS
QIO decision -
on re
on Data
ALJ logs
No
ogsl SDPS Accept review
No QIO Provider/
QIO case SDPS decision Decision? practitioner request
Hearing? Reverse QIO
Request Decision? decision
reconsiders
Standard
No
Days*- Days*-
=
C notifies W
60 30
QIO provider/
End
provider/practitioner
intermediary/beneficiary practitioner
Notify
notifies SDPS
QIO
provider/practitioner
intermediary/beneficiary
process.
of
case
End action End Denial
refers
No necessary appropriate agency
Payment Quality (Quality)
(Utilization) on
QIO to Initial Determination logs review
End
SDPS
days
QIO decision
case
working
=
Yes
logs in
Review
medical
Days*- requires closes and Days-
C information SDPS No notifies
15
QIO QIO decision **W
case Concern provider/
Confirmed? practitioner
additional record QIO
Retrospective mandatory
No
r daysr
to
review records records
provider Days*- Days*-
receives for sends
requests (2004b).
C reviews Yes C reviews calenda
e 30 Concern? provider/ Provider/ responds 20 response = Standard
QIO concern practitione practitioner
QIO cas QIO from QIO QIO
medical medical
Days
*C- CMS
12.1
FIGURE SOURCE:
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 305
A second screening review is performed after any missing documentation is
provided.
First Physician Review
In the first physician review, a physician reviewer determines whether
the concerns of the nonphysician reviewer are valid and if other concerns
not previously identified exist. If the physician reviewer determines there
are valid concerns, the QIO sends a preliminary notice to the provider and
offers the opportunity to discuss the case. If there is a potential gross and
flagrant violation, the case follows a separate path.
Opportunity for Discussion
If the provider responds to the QIO's offer to discuss the case, the case
is referred to a second physician reviewer. If there is no response, the first
reviewer may make a final determination and notify the parties, or the re-
viewer may refer the case to a second physician if he or she is still unable to
identify the source of the concern.
Second Physician Review
The second physician reviews the medical records, discusses the case
with the parties involved, and makes the final decision.
Third Physician Review
When the provider under review requests reconsideration for initial uti-
lization denials or rereview for confirmed DRG or quality concerns, a phy-
sician reviewer other than the ones from the first and second reviews exam-
ines the case.
Provider Response to Concerns
If a simple corrective action is needed (such as a DRG adjustment), the
QIO can give the provider a chance to address the concern. For other issues,
the provider must establish and complete a quality improvement plan (or a
corrective action plan when associated with sanction activity), with assis-
tance from the QIO as needed. Exceptions include flagrant violations and
dangers to beneficiaries. No plan is needed when:
· The case is referred to a state or federal enforcement agency,
· There is a satisfactory explanation for the pattern,
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306 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
· No reason for the pattern is found,
· The provider has already found the problem and taken action,
· The pattern for the case is the same as a pattern already identified
and acted upon, or
· The physician is no longer in practice.
Other options are used when the provider is unwilling to formulate a plan
or fails to complete the plan satisfactorily. The QIO must use the least
intrusive option from among the following:
· Impose a QIO-directed plan (see Box 12.1),
· Negotiate a plan with the provider,
· Refer the case to the CMS Regional Office (or state survey agency),
· Refer the case to the state licensing board,
· Refer the case to the Medicare carrier, or
BOX 12.1 Example of Recommendation for a Quality
Improvement Plan
"Issue: A 68-year old man underwent a total hip replacement. Post-
operatively, the patient developed a deep vein thrombosis (DVT). The
patient is concerned that the DVT was the result of the care he received.
Per the record, the patient did not receive pharmacological anticoagulant
therapy after his surgery. During the opportunity for discussion, the phy-
sician stated that he never uses pharmacological anticoagulant therapy,
only mechanical.
"Recommendation/Action: Recommend that both the provider and
the practitioner develop and implement a QIP, and also recommend ini-
tiation of intensified review activity.
"This situation warrants a QIP as there is published clinical evidence
which shows that the standard of practice is to use a combination of
anticoagulant medication and mechanical treatment after this type of pro-
cedure, and the physician states that he routinely chooses not to use
pharmacological options. This is both the provider and physician's re-
sponsibility, since the hospital is expected to have their Chief of Staff
work with a physician when accepted practice is not being followed. In-
tensified review of similar cases after QIP implementation can then be
done to ensure the updated approach is being carried out."
SOURCE: Lumetra (2004).
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 307
· Refer the case to the Office of the Inspector General of DHHS for
sanctions.
Sanctions can include a period of exclusion from the Medicare program
(for a minimum of 1 year) and a monetary penalty (up to $10,000 for each
instance). The provider may have the right to a preexclusion hearing, an
administrative review, or a judicial review.
QIO Monitoring
The QIO monitors the provider during implementation of the quality
improvement plan and must develop criteria that can be used to judge suc-
cess, which may include a process or outcome assessment.
Provider Profiling Activities
On the basis of all of its review activities, each QIO was required to
conduct certain profiling activities (CMS, 2002), including:
· Construction of a database consisting of data collected from all re-
view activities for use in HPMP;
· Identification of possible interventions;
· Generation of provider profiles, when needed;
· Production of reports upon request by providers or CMS; and
· Determination of whether patterns indicative of a systemic prob-
lem exist.
If the QIO suspected a systemic problem, it could ask the provider to sub-
mit written guidelines of standard operating procedures. For example, if a
communications problem between two specific departments of a hospital
existed, the QIO may have asked the hospital to provide its internal guide-
lines on how the departments are supposed to communicate. For all review
types, CMS required QIOs to maintain the Case Review Information Sys-
tem (CRIS), a tool used to report on activities to CMS (see Chapter 13).
Through this application, the QIOs entered data related to the case review
process to monitor a case's progress and ultimately produce reports on the
timeliness of case review completion (CMS, 2002, 2004a,b).
MEDIATION IN THE 7TH SOW
QIOs reviewed all quality-of-care complaints filed by Medicare benefi-
ciaries or their representatives. In any quality review, the QIO first deter-
mined whether no substantial improvement opportunities are identified or
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314 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
TABLE 12.3 Texas 1-Day-Stay and Other Statewide Statistics for All
DRGs
Number of Total Percent
DRG Discharges after Number of 1-Day
Code DRG Description 1-Day Stay Discharges Stays
005 Extracranial vascular procedures 2,231 6,971 32.00
006 Carpal tunnel release 13 25 52.00
066 Epistaxis 91 369 24.66
134 Hypertension 942 4,368 21.57
NOTE: The 1-day-stay count excludes deaths, transfers, and patients leaving against
medical advice. Data are for all prospective payment system inpatient hospitals (n = 340),
FY 2003 (October 1, 2002, through September 30, 2003).
SOURCE: Texas Medical Foundation (2005b).
Box 12.3 gives an example of how the Texas Medical Foundation
(Texas's QIO) used data to identify a problem area (1-day stays for specific
DRG codes) and then implemented a project to address the issue, including
the use of a collaborative (see Chapter 8).
HPMP QIOSC
The Texas Medical Foundation acted as the QIOSC for the HPMP
during the 7th SOW to:
· Develop and implement projects related to payment errors;
· Identify trends in payment errors;
· Advise the QIOs, hospitals, and others on the implementation of
HPMP;
· Work with CDACs to produce PEPPER; and
· Develop tools, flowcharts, templates, etc., to help providers make
decisions related to coding and the documentation of services (CMS, 2004a).
The Texas Medical Foundation continues as the HPMP QIOSC in the
8th SOW.
QIO Performance Evaluation
QIOs documented achievement in HPMP by comparing the statewide
payment error rate at the baseline with the rate calculated at the end of the
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 315
7th SOW (CMS, 2002). The Project Officer and Government Task Leader
determined the success of each QIO on the basis of the following criteria:
· The timeliness of reviews (the QIOs must meet the timelines at least
90 percent of the time),
· The completion of a reliability assessment, and
· Reporting of processes and findings to CRIS (CMS, 2002).
Additionally, the QIOs had to meet one of the following two criteria: (1)
the follow-up payment error rate could not be more than 1.5 standard er-
rors above the baseline error rate or (2) the QIO made effort and progress
on all improvement plans (CMS, 2002). Deliverables included the develop-
ment of a project related to problematic utilization or billing patterns and
the determination of inter-rated reliability for review decisions (CMS, 2002).
HPMP IN THE 8TH SOW
In the 8th SOW, HPMP continues as Task 3b (CMS, 2005b). Again,
the purpose of HPMP is to monitor and reduce payment error rates for fee-
for-service beneficiary services in the hospital setting by looking at the accu-
racies of DRG codes, the medical necessity of services, and the appropriate-
ness of the care setting. The QIOs continue with their hospital profiling
activities as well as monitoring of admission and billing patterns. CMS con-
tinues to provide hospital-level reports, and subsequently, the QIOs must
submit a project proposal to work on an inappropriate or incorrect utiliza-
tion pattern or billing or coding pattern in either the short-term or the long-
term acute care setting. Again, all projects are subject to the approval of the
Project Officer and Government Task Leader and are funded as special
projects under Task 4 of the 8th SOW (CMS, 2005b).
QIO success on the HPMP task in the 8th SOW is based on the
following:
· Absolute and net payment error rates (no more than 1.5 standard
errors above the baseline error rate) (1 point for each rate),
· The timeliness of reviews (2 points),
· Approval of the project (or justification for exclusion) and project
implementation (3 points), and
· Documentation of monitoring activities (1 point) (CMS, 2005b).
If the QIO has an article about an HPMP project accepted for publication
in peer-reviewed journals, it earns 1 extra-credit point. If the QIO does not
publish its results anywhere (including the QIO's newsletter), 1 point is
deducted. If no project is approved and no justification has been submitted,
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316 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
BOX 12.3 Texas Medical Foundation One-Day-Stay Project
"Details
According to analysis performed by the Texas Medical Foundation
(TMF), there was a 51 percent increase in one-day stay discharges be-
tween fiscal year (FY) 1999 and FY 2001, with a 164 percent increase in
TMF-issued admission denials for one-day stay claims during the same
period. In FY 2002, one-day stay discharges comprised 10.5 percent of
total Medicare discharges in Texas; of these discharges, 17 percent were
associated with diagnosis related groups (DRGs) 127 (heart failure &
shock), 143 (chest pain), 182/183 (esophagitis, gastroenteritis and mis-
cellaneous digestive disorders age >17 with/without CC [complication
and comorbidity]) and 296/297 (nutritional and metabolic disorders age
>17 with/without CC). Because one-day stays are known to be associ-
ated with medically unnecessary admissions, TMF chose to develop a
Hospital Payment Monitoring Program (HPMP) project in this area. The
goal of the One-Day Stay Project is to reduce inappropriate admissions
for the following target DRGs: 127, 143, 182/183, and 296/297.
"Primary criteria for hospital inclusion in the project:
· At least 500 total one-day stay claims in FY 2002 and
· At least a 20 percent increase in one-day stay claims from FY 2000
to FY 2002.
"Secondary criteria for hospital inclusion in the project:
· Three or more target DRGs with at least 25 one-day stay claims
each or
· A proportion of one-day stay claims to total claims greater than or
equal to 12.8 percent (the 75th percentile for the proportion of one-day
stay claims to total claims) and one target DRG with at least 25 one-
day stay claims.
Of the 341 Texas PPS hospitals included in the claims data in
FY 2002, 20 hospitals met the criteria for inclusion in the project. These
20 hospitals combined had 20,262 one-day stays, which represented
24.7 percent of the total one-day stays in Texas for FY 2002. The 20
hospitals had 2,969 one-day stays billed to the target DRGs, which rep-
resented 18.1 percent of the total one-day stays for the 20 hospitals.
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 317
"TMF is requesting that all hospitals:
· Analyze comparative data related to the project indicator provided
by TMF as well as one-day stay data provided periodically by TMF in the
Program for Evaluating Payment Patterns Electronic Report (PEPPER)
to determine if problems might exist.
· Provide feedback to the medical staff on concerns related to inap-
propriate admission/discharge/quality of care and provide education on
alternatives to inpatient admission when appropriate.
· Review TMF's educational information and distribute educational
materials and tools provided by TMF to medical staff and other staff as
appropriate.
"TMF is requesting that project hospitals:
· Perform an audit of randomly selected one-day stay cases identi-
fied by TMF in order to determine if a problem related to one-day stays
exists.
· Develop an improvement plan if the internal audit identifies prob-
lems.
· Notify TMF of audit findings and any improvement plan initiated.
· Participate in TMF's One-Day Stay Collaborative (see below).
"TMF will:
· Perform case review of project hospital medical records to collect
initial baseline data and later remeasurement data.
· Evaluate project hospital action taken regarding improvement
plans and the quality of hospital-developed improvement plans and pro-
vide feedback as needed.
· Perform on-site hospital visits to project hospitals as needed to
provide education.
· Provide one-day stay data and improvement tools to hospitals
statewide.
· Conduct a One-Day Stay Collaborative over a one-year period
based on the Institute for Healthcare Improvement's Breakthrough se-
ries. First face-to-face session will be held October 16, 2003.
· Conduct teleconferences on coding of DRGs associated with Medi-
care coding payment errors and other relevant topics.
· Disseminate educational newsletters."
SOURCE: Texas Medical Foundation (2005c).
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318 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
the QIO loses 2 points. The QIO will receive an excellent pass for attaining
7 or more points, a full pass for 6 points, a conditional pass for 5 points,
and a not pass for a score of 4 points or less (CMS, 2005b).
Deliverables for the HPMP task include a project proposal (or justifica-
tion for exclusion) and monitoring reports via the Program Activity Report-
ing Tool (CMS, 2005b).
IMPACT OF PROTECTIVE ACTIVITIES IN THE 7TH SOW
Interaction with Providers
On the IOM committee's site visits to 11 QIOs, 3 QIOs mentioned that
they have lingering difficulties in terms of their reputations as punitive or-
ganizations stemming from the history of the QIO program as one of pure
utilization review. Additionally, during the IOM committee telephone in-
terviews with the chief executive officers (CEOs) of the QIOs, 7 of 19 QIO
CEOs noted that the QIOs were perceived as punitive enforcers. These 7
CEOs believed that that perception is currently more of an issue among
nursing homes and home health agencies but that there is some residual
feeling that the QIOs are punitive enforcers in the physician community in
some states. One CEO indicated, "Perception as a punitive regulator is a
problem. We are not generally viewed that way by hospitals, but it has
taken a long time to convince nursing homes that we are not a Survey and
Certification entity. Home health agencies are similarly concerned. Physi-
cians don't care because they won't see any value or incentive until pay for
performance." Another CEO commented, "Some older physicians still have
the historical PSRO [Professional Standards Review Organization] mindset.
We have a huge educational push to educate on quality assurance."
However, general consensus exists among QIOs (as exhibited during
multiple site visits, interviews, and other personal interactions by the IOM
committee) that this reputation has improved. Conversations with hospital
CEOs confirm this perception (NORC, 2004; Bradley et al., 2005).
Case Review and Quality Improvement
In the telephone interviews, 19 QIO CEOs were asked whether the
QIOs should continue the case review function and whether the perfor-
mance of the case review function added to quality improvement. Only one
CEO was not sure that the QIOs need to be the entity performing Medicare
case reviews and appeals, but even he was not sure who else would do it
well and believed that there is a need for the function to be continued by a
qualified entity. The remaining 18 CEOs believed that case review was an
integral part of the QIOs' overall quality improvement efforts because of its
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 319
ability to protect beneficiaries and identify systemic quality problems. They
strongly expressed their feelings about the need to keep case review as part
of their repertoire and about the direct connections to quality improve-
ment work:
· "Quality improvement is often predicated on the [basis of the] find-
ings of case review. The connections between these functions should be
strengthened if anything--not separated. Separation would be a disaster.
We would no longer have a system."
· "Case review identifies problems that often reflect a systemic prob-
lem. It is essential to have a feedback component from case review to QI
[quality improvement]."
· "Case reviews give us an opportunity for more oversight, and if it is
not done, then poor practices will creep back up. Someone has to watch."
· "Performing case review gives us an opportunity to observe trends.
This was a good change in the 7th SOW because it allows us to do some-
thing constructive rather than be a whistleblower. We actually educate pro-
viders, and this is positive in changing patterns."
Three of the 18 CEOs supporting case review additionally emphasized the
important role of case review in knowledge transfer. For example, one CEO
stated, "Certainly, case review is not a population-based exercise but it
brings us closer to the daily practice of patient care, obstacles to delivering
care, and problems with education level of both provider and patient. While
the focus is on changing individual physicians, we incorporate lessons to a
broader audience as part of knowledge transfer."
Case Review Activities
From October 2002 through September 2004, the QIOs received 5,921
separate complaints (i.e., complaints only and not appeals) by telephone or
letter from beneficiaries (personal communications, S. Blackstock, April 29,
2005, and February 11, 2005). These complaints required the examination
of 11,372 sets of medical records because of many complaints involving
treatment by more than one provider during the episode of care. From Sep-
tember 2003 through July 2004, of the 2,321 completed examinations of
beneficiary complaints, 357 were deemed appropriate for the mediation
process. Of those, detailed data were available for 172. The data revealed
that 79 cases had reached agreement, whereas the remaining 93 were still in
progress or were withdrawn from the process or the provider had refused
mediation. Thirty-one QIOs have handled at least one case deemed appro-
priate for mediation, and 15 QIOs have completed at least one mediation
case (Rollow, 2005).
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320 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
In all complaint cases, regardless of the use of mediation, the QIOs
surveyed beneficiaries on their satisfaction with the complaint review pro-
cess. This survey was implemented nationally in April 2003. From April
2003 through July 2004, there were 3,378 beneficiary complaint cases (per-
sonal communication, S. Blackstock, February 11, 2005). Of those, 357
entered the mediation process. The QIOs administered 1,964 satisfaction
surveys for completed cases. For the traditional process, 93.4 percent of
respondents expressed that they were satisfied or very satisfied overall. The
rate of satisfaction with the case manager was 92 percent and, the rate of
satisfaction with the QIO response was 93 percent., However, only 39 per-
cent of respondents were satisfied with the review outcome. The QIOs used
the survey results to alter their review processes. After they made adjust-
ments to the process, a comparison of the levels of satisfaction levels for the
period from April to June 2003 with the levels of satisfaction from April to
June 2004 showed improvements in the satisfaction levels for both the pro-
cess (from 93 to 95 percent) and the outcomes (39 to 60 percent).
During FY 2004 (October 2003 to September 2004), the QIOs con-
ducted 8,168 reviews of appeals (HINNs, NODMARs, and Grijalva re-
views), plus retrospective reviews of an additional 3,084 cases of HINNs
(Rollow, 2005). All other review types (such as EMTALA, CMS referrals,
and higher-weighted DRGs) accounted for an additional 46,062 case re-
views during this time period. Comparatively, only 14 reviews for assistants
at cataract surgery were performed during the same time period, and all
cases were approved (personal communication, S. Blackstock, April 29,
2005).
HPMP
In the 7th SOW, opportunities to save costs by preventing payment
errors were generally the result of the prevention of unnecessary admis-
sions, as underpayment and upcoding of cases tended to cancel each other
out (Rollow, 2005). The baseline absolute payment error rates for indi-
vidual states at the beginning of the 7th SOW ranged from 1.19 to 8.00 per-
cent, with a mean payment error rate of 4.33 percent and a median pay-
ment error rate of 4.24 percent (QIONet Dashboard, accessed November
11, 2005). The exact time frame for each QIO's baseline differed, depend-
ing on what round of the SOW in which it started. For the second quarter
of FY 2004, the state error rates ranged from 0.32 to 10.84 percent, with a
mean error rate of 4.24 percent and a median error rate of 4.25 percent.
However, the states with the highest and lowest rates of error in 2004 were
not necessarily the same as those at the baseline (QIONet Dashboard, ac-
cessed November 11, 2005).
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 321
TABLE 12.4 Trends for National Weighted Payment Error Rates
Period Error Rate (percent)
FY 2001 4.7
FY 2002 4.82
FY 2003 (overall) 4.64
FY 2003 Q2 4.06
FY 2003 Q3 4.37
FY 2003 Q4 4.64
FY 2004 Q1 4.97
FY 2004 Q2 4.81
FY 2003 Q3 through FY 2004 Q2 (overall) 4.70
NOTE: Q = quarter.
SOURCE: QIONet Dashboard (accessed April 13, 2005, and November 11, 2005).
For FY 2001, the national weighted rate (the total amount of money
paid in error divided by the total reimbursements) was 4.7 percent (QIONet
Dashboard, accessed November 11, 2005). The most recent data cover the
period from the third quarter of FY 2003 through the second quarter of
FY 2004. For this time period, the national weighted rate was again 4.7 per-
cent. Table 12.4 lists the national weighted payment error rates for FY 2001
to FY 2003, with the rates for individual quarters for FY 2003 to FY 2004
provided when the data were available. Although individual quarters show
minor variations, the overall national rate since the baseline in FY 2001 has
remained steady.
Telephone Interviews
In the telephone interviews, when 16 QIO CEOs were asked whether
the QIOs should continue their payment error review function, only 1 CEO
responded with a definitive negative: "It is not essential; we have found in
the past as many payment errors to the good as to the bad." The remaining
15 said that the function is compatible with their mission; however, 6 of
those 15 expressed less passion for QIOs' need to continue the payment
error review function than their passion for their need to continue the case
review function; for example, one CEO stated, "Payment error is an impor-
tant part of the care program. The functions go hand in hand, but I could
live without this one if forced to." Another CEO commented, "I don't have
as strong a feeling about payment error as case review. Our payment error
rates are pretty low."
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322 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
The remainder of the CEOs (9 of 15) said that that payment error
reviews are definitely useful to quality improvement by providing leverage,
enhanced access to provider staff for educational interventions, and mon-
etary savings to Medicare. One CEO commented, "Payment error gives us
one more reason to walk through the hospital doors, and as a result, we
develop closer relationships by offering chances to educate. We have the
opportunity to talk to different staff segments than we usually do." An-
other CEO stated, "It is useful to maintain the payment error function be-
cause it gives us better credibility. Appropriate utilization and appropriate
quality go hand in hand. Also, having this function helps sell the QIO as a
resource to facilities. Most of the payment errors are a result of bad report-
ing that the QIO can help the facility to address."
Financial Costs
At the end of calendar year 2004, CMS expected the QIOs to spend
$45.5 million on the beneficiary complaint response program in the 7th
SOW (Task 3a). This represents approximately 5.8 percent of the QIO core
contract budget. CMS estimated expenditures for HPMP (Task 3b) at $41.2
million, or approximately 5.2 percent of the core contract budget. The cost
of all other protection activities (Task 3c) was estimated at $161.7 million
on Task 3c, which represents approximately 20.5 percent of the QIO core
contract budget (personal communication, C. Lazarus, March 17, 2005).
SUMMARY
This chapter has discussed issues related to the case review activities of
the QIO program. The following are some of the main themes of this
chapter, which are reflected in the findings and conclusions presented in
Chapter 2:
· The QIO program's origins are based on case review activities that
focused on identifying utilization outliers in the hospital setting. The QIOs
have significant experience with these activities.
· The categories of review have increased over the life of the QIO
program, but the focus of the program itself has shifted away from utiliza-
tion review and toward collaboration to improve the quality of care. This is
reflected in the development of a mediation process to address beneficiary
complaints through better communication with the provider and the use of
quality improvement plans by providers to address inadequate practice pat-
terns found during review.
· Although the QIO program has shifted toward performing a col-
laborative role, some providers still have a lingering perception that QIOs
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PROTECTION OF BENEFICIARIES AND PROGRAM INTEGRITY 323
are punitive organizations. Despite this perception, many QIOs argue that
the dual roles can be synergistic.
· Some categories of review may have very low value, such as reviews
for assistants at cataract surgery. Reviews for payment errors showed fairly
equal numbers of over- and underpayments. In general, payment error rates
are currently low (less than 5 percent) and remain steady.
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Representative terms from entire chapter:
dimension perfor
