Introduction

In response to criticisms from Congress and from independent oversight agencies, the Centers for Medicare & Medicaid Services (CMS) is using its 9th Statement of Work (SOW), effective August 2008 through July 2011, to impose more specific requirements on its Quality Improvement Organization (QIO) contractors.  QIOs, in addition to other tasks, are responsible for reviewing the quality of care received by Medicare beneficiaries, including beneficiary-initiated complaints about the care and treatment received in Medicare-participating hospitals and other care settings.  As discussed in the Center for Medicare Advocacy's Weekly Alert of August 30, 2007, beneficiaries' complaints about the quality of care they received are handled through the QIO serving the geographic area in which the service was provided.

Background

QIOs were initially established as Peer Review Organizations (PROs) by the Peer Review Improvement Act of 1982.  This Act directed the Secretary of Health and Human Services (HHS) to enter into contracts with these organizations for "the purposes of promoting the effective, efficient, and economical delivery of health care services, and of promoting the quality of services of the type for which payment may be made."

Bolstered by reports issued by the Office of Inspector General (OIG), the Government Accountability Office (GAO), and the Institute of Medicine (IOM),[1] advocates and policymakers have been focusing on whether, and to what extent, QIOs appropriately serve the interests of Medicare beneficiaries in their quality review activities.  The concerns have focused on the failure of the QIO complaint process to provide beneficiaries with meaningful feedback to their complaints, QIOs' failure to put enough resources into its beneficiary complaint review processes, and the treatment of beneficiaries as an afterthought as compared to other QIO activities.

Proposed Congressional Legislation to Fix the QIO Process

Some members of Congress have addressed these criticisms through proposed legislation.  While there appears to be little movement on these bills, CMS seems to have taken notice.  Many of the changes that are reflected in the 9th SOW may have resulted from these legislative critiques.

Senator Charles Grassley (R-IA), the Ranking Member of the Senate Finance Committee, which has jurisdiction over Medicare, introduced legislation on August 2, 2007 (S. 1947) along with Finance Committee Chairman, Max Baucus (D-MT), to overhaul the QIO program.  The bill incorporates many of the recommendations proposed in the reports issued by the OIG, the GAO, and the IOM.  In particular, the Grassley-Baucus bill, following the IOM's recommendations, would remove the beneficiary complaint review process from QIOs and place the authority for that function with a separate entity.  That entity would be obligated to disclose their findings to a beneficiary who has filed a complaint. Further, the bill would permit QIOs to share data with providers for quality improvement and safety purposes, target the poorest-performing providers, eliminate non-competitive renewals of an incumbent QIO's Statement of Work, and require the Secretary to perform interim and final evaluations of individual QIOs and the program as a whole.

Another bill (S. 2396) introduced on November 16, 2007 by Orrin Hatch (R-UT), also a member of the Senate Finance Committee, suggests similar improvements and updates to the QIO program.  The Hatch bill would leave the beneficiary complaint process with the QIOs, but, like the Grassley-Baucus bill would require the QIOs to disclose their findings to a beneficiary who has filed a complaint.  The bill would also require the Secretary to direct an audit of each QIOs' handling of beneficiary complaints.

A third bill (H.R. 1046) was introduced in the House on February 14, 2007 by Michael Burgess (R-TX).  Rep. Burgess is a member of the Health Subcommittee of the House Committee on Energy and Commerce, which has partial jurisdiction over Medicare.  The Burgess bill would require QIOs to provide quality improvement activities to Medicare Advantage and prescription drug plans.  The Burgess bill has many similarities to the Hatch bill, including the requirement that QIOs disclose their findings on a beneficiary's complaint.  However, the Burgess bill would also allow each state to decide if the QIO should perform quality improvement activities for the state's Medicaid program.

CMS' 9th Statement of Work

On February 5, 2008, CMS announced that it had released solicitations for the three-year, $1.128 billion 9th SOW which will include several changes from the 8th SOW.  The CMS fact sheet announcing the solicitation indicates that CMS has attempted to accommodate what some members of Congress have highlighted in their legislative reform proposals.  In this regard, the SOW states that it is:

[r]esponding to concerns from the Institute of Medicine (IOM), the Government Accountability Office (GAO), and Congress, and in an effort to improve oversight of the QIOs, CMS is channeling additional efforts and resources to ensure the QIOs provide Medicare beneficiaries with the highest value in their efforts to improve the quality of care among health care providers. 

The 9th SOW identifies four key themes for QIOs to address: Beneficiary Protection, Patient Safety, Prevention, and Care Transitions. The SOW also includes a fifth theme, Prevention Disparities related to diabetes, which is directed only to 33 states with sufficient underserved Medicare diabetes populations, and a sixth, optional, theme, Prevention: Chronic Kidney Disease. Within each theme, CMS identifies tasks that the QIO must complete and the evaluation criteria that CMS will use.

One of the key changes in the 9th SOW is that CMS will undertake an interim evaluation of each QIO after 18 months.  This evaluation, one of the provisions of the Grassley-Baucus bill, will focus on three of the key themes (excluding Beneficiary Protection).  If the QIO does not pass the evaluation criteria for a particular theme or for a component within a theme, CMS may elect not to continue the work (or the funding) for that theme or component.

As part of the 9th SOW, CMS has taken the unprecedented step of releasing a list of nursing homes and hospitals that QIOs should target for improvement in several key quality measures—another provision of the Grassley-Baucus bill. For nursing homes, CMS distributed a list of over 4,000 nursing homes which are targeted for improvement either for their "high-risk pressure ulcer rate" or for their "physical restraint rates."  For hospitals, CMS distributed a list of over 900 hospitals which are targeted for improvement through the "Surgical Care Improvement Program."  Both lists are available at www.cms.hhs.gov/QualityImprovementOrgs/Downloads. 

As CMS acknowledges, they have attempted to respond to Congressional concerns about QIOs by updating the SOW. However, many of the changes that have been proposed by the OIG, the GAO, the IOM, and key members of Congress have not been incorporated into the 9th SOW.  These changes would require new laws and might provide better quality improvement and better execution of the beneficiary complaint process.

Advice for Advocates

In eight states—California, Minnesota, Mississippi, North Carolina, Nevada, New York, Oklahoma, and South Carolina—the QIO is required to compete for the 9th SOW because they did not meet all of their performance criteria outlined in the 8th SOW.  Further, the QIOs that are located outside the state for which they have a contract - Alaska, Idaho, Maine, Vermont, and Wyoming - will have to compete if CMS receives other proposals for those states.  While all advocates should be keenly aware of the QIOs in their state,[2] advocates in these particular states should recognize the possibility that the current QIO might be replaced by a new contractor.  

Advocates should not hesitate to file a complaint with the QIO when their clients encounter problems with the quality of their care.  Advocates who have a difficult time with their QIO should consider contacting the appropriate Representative or Senator, particularly if they have been one of the sponsors of legislation about QIOs.  Advocates should also get involved with any "public participant" activities associated with QIO entities in their states.  This work can help shape policy direction and accountability.