Add Medicare peer review organizations to HCFA's fraud-busting arsenal.
HCFA may ask PROs next year to resume combing through providers' files looking for medically unnecessary services delivered to Medicare beneficiaries, MODERN HEALTHCARE has learned.
Such an assignment in the next round of PRO contracts would represent a change in HCFA's emphasis for the PROs. Although the PROs were created to detect overutilization and improve quality, the last three-year round of contracts-called the PRO "scope of work"-heavily emphasized continuous quality improvement.
If beneficiaries complain or HCFA or HHS' inspector general's office directs it, PROs are required under the law to investigate reports of poor quality or overutilization. But beyond that, their examination of utilization and fraud is largely dictated by their contracts with HCFA.
Harry Feder, senior vice president for IPRO in New York, said 85% to 90% of the current scope of work is related to quality improvement. In earlier scopes of work, as much as 35% to 45% was related to reviewing records for medical necessity and appropriateness of care, said John DiNardi, executive director of KePRO in Pennsylvania.
Although HCFA has yet to complete its draft proposal for the next scope of work, detection of fraud, abuse and waste is part of a "laundry list of things that would be appropriate to do," said Henry Koehler, director of PRO programs in HCFA's office of clinical standards and quality.
"There is certainly discussion about having PROs (look for fraud) as part of the scope," Koehler said.
"Everybody's concerned with saving tax dollars," added Lanona Robinson, vice president of communications with Florida Medical Quality Assurance, the state's PRO. "Every opportunity to spend those dollars wisely is being investigated."
The next scope of work is scheduled to begin in 1999. Separate groups of PROs, which generally cover a single state, will begin serving their contracts in April, July and October.
In the current scope of work, HCFA is paying $525 million to 53 PROs over three years, with another $75 million being spent on support activities and other items, Koehler said.
It was only two years ago that HCFA asked the PROs, in the current scope of work, to move away from retrospective case reviews and audits and begin examining patterns of care to detect where quality could be improved.
That change in focus was a reaction to the sharp objections of providers, who disliked the PROs' role as utilization cops.
And it came despite warnings that examining only the quality of care delivered to the Medicare population would detract from PROs' ability to detect overutilization.
In fact, as the fifth scope was about to start, HHS' inspector general's office said there had been a drastic decrease in PROs' referrals of poor-performing providers to the inspector general's office for sanctions (Feb. 19, 1996, p. 23).
If HCFA follows through on a proposal to deploy PROs in its fraud battles, it would come in the context of an overall campaign against fraud, waste and abuse that already has providers up in arms.
The Clinton administration, however, wants to keep the pressure on because it is relying on savings from fraud settlements to fund such programs as its proposal to allow people under 65 to purchase Medicare coverage (March 23, p. 8).
Providers are fighting back by suing HHS to stop its Physicians at Teaching Hospitals probe and its investigation into hospital Medicare laboratory billing practices. Providers also are lobbying Congress to pass a bill curbing federal prosecutors' ability to use the False Claims Act (See related story, this page).
But despite providers' past objections to peer-reviewers' activities, some PRO representatives said they wouldn't rely nearly as much on case review now as in the past. That comes in part from the PROs' growing ability to analyze patterns of care for quality deficiencies in the current scope of work.
"I think we have better data systems. I think all of us have better analytical staffs," DiNardi said. "We would have much more capability to hone in on specific problems, so there would be less record review."
Both the Pennsylvania and New York PROs are conducting pilot projects related to the possible activities in the next scope of work. KePRO is examining a database of hospital admissions to determine whether some patients were admitted unnecessarily for short stays, DiNardi said.
IPRO, meanwhile, has been examining hospital admission records to determine whether there have been inappropriate readmissions for cardiac catheterizations or angiographies following angioplasties or stent replacements, Feder said.
Feder said the concern was that hospitals may have increased Medicare costs by readmitting patients inappropriately for a second procedure when it could have been done along with the first.