After being threatened with exclusion, Medicare peer review organizations have retained a role in monitoring the performance of private-sector Medicare health plans.
The provision is contained in the recently approved federal balanced-budget law.
Budget legislation passed by the House earlier this year would have allowed Medicare managed-care and private fee-for-service plans to bypass external quality review if they were accredited as meeting quality standards by such organizations as the National Committee for Quality Assurance.
The Congressional Budget Office had estimated the provision would have saved the government $100 million between 1998 and 2002. HCFA estimates it will pay the peer review organizations $270 million in federal fiscal 1997, which ends Sept. 30.
At the same time, however, it would have meant a reduced role for the 39 PROs-which now prefer to be called quality improvement organizations-because enrollment in managed-care plans and the new private fee-for-service arrangements are expected to expand under the new budget law.
When the House passed its version of the legislation, a House committee aide said lawmakers felt that private-sector accreditation for Medicare health plans was "a better way to go" than the quasi-public role of the QIOs.
Vigorous lobbying by the American Health Quality Association, the QIOs' umbrella group, resulted in the Senate passing a watered-down version of the accreditation provision under which Medicare managed-care plans still would have been subject to QIO review.
The final legislation signed by President Clinton last month includes some revisions that bow to managed-care plans' concerns. It allows HCFA to waive QIO review for plans that maintain an excellent record of quality assurance and would require that QIO review not duplicate the activities of private accreditation bodies.
Health plans felt it was expensive and burdensome to demonstrate to both accreditation bodies and QIOs that they had met standards, said Donald B. White, spokesman for the American Association of Health Plans.
"We continue to be opposed to a requirement for review by the (QIOs) that would be duplicative of review by voluntary accreditation organizations," White said.
But Josef Reum, executive vice president of AHQA, said the budget law shows lawmakers understand the importance of quality review and the distinction between it and accreditation. Accreditation is based on a brief review-a snapshot of what's going on at a facility-while quality review is a longer examination, he said.
"Accreditation is like a Polaroid. External quality review is more like a documentary," Reum said.