The American Medical Association last month joined other provider groups in opposing the expansion of Medicare peer-review organizations to detect healthcare fraud.
The AMA wants HCFA to eliminate a "payment error prevention program" from its proposed contracts with the PROs. The program calls for PROs to search hospital billing data and individual patient records for incorrect billing.
The PROs -- 37 private contractors hired by HCFA to analyze the quality of care provided to Medicare beneficiaries -- would look for incorrect billing resulting from poor documentation, incorrect DRG assignment, inappropriate transfers and medically unnecessary care.
PROs have always been instructed to work with hospitals to reduce such errors. But the contract for the next three-year cycle -- called a "scope of work" -- also requests that the PROs refer findings to Medicare intermediaries and/or law-enforcement agencies.
In return for reducing payment errors, the PROs will be rewarded financially.
Although the PROs have always monitored utilization and tried to identify fraud, in recent years they have done less retrospective case review and more analysis of care patterns to determine where quality could be improved.
At a meeting early last month in Honolulu, the AMA endorsed a report drafted by its medical services council. "It appears that the primary focus of the PROs' sixth scope of work is to protect the fiscal integrity of the Medicare trust fund rather than to improve the quality of care provided to Medicare beneficiaries," the report said.
Hospital groups have already said they oppose expansion of the PROs' duties, and the PROs have said they are uncomfortable with resuming the role of utilization cops (Nov. 9, p. 2). Adding the AMA to the list of opponents exerts more pressure on HCFA to revise the contract.
A HCFA official, however, said the payment-error-prevention program was "consistent with the PROs' mission" to try to improve healthcare quality.
"The payment-error-prevention program is taking a continuous-quality-improvement approach to fixing the payment-error problem prospectively," said Jeffrey Kang, M.D., director of HCFA's office of clinical standards and quality.