The Centers for Medicare and Medicaid Services' plan to develop a standard patient-satisfaction survey for hospitals mushroomed last week into a federal lawsuit by a major public polling firm that accuses CMS Administrator Tom Scully of intimidation and collusion.
The lawsuit, filed by the Washington-based Gallup Organization on April 9 in U.S. District Court in Washington, seeks $5 million in damages and an injunction to prevent Scully from further violating Gallup's rights as well as HHS rules governing the development of standards and cooperation with outside organizations.
The lawsuit alleges that Scully and the CMS colluded with officials of the survey firm National Research Corp./Picker in developing the patient survey that hospitals eventually will be required to administer and publicly post aggregate results of as a condition of Medicare participation (Feb. 10, p. 8).
Gallup is concerned that standardizing the survey based on one company's model or survey questions will create a monopoly for that company and an unfair competitive environment. Scully has said his agency will not select just one survey firm and no contract has been awarded.
In an interview last week with Modern Healthcare, Scully said the lawsuit is an attention grabber for Gallup and its allegations are baseless. Asked what his immediate steps would be in response to the lawsuit, Scully said, "I'm going to go home and take a nap. ... I'm not going to do a damn thing."
As the lawsuit hit the court last week, congressional inquiries also began. On April 8, Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee, sent letters to Scully and Carolyn Clancy, director of the Agency for Healthcare Research and Quality, requesting information on the survey-development process and whether it involved any conflicts of interest. Scully said he would fully cooperate with Tauzin's request.
A spokesman for Tauzin declined to discuss the matter in detail, referring instead to the two letters. Tauzin became involved after Rep. Lee Terry (R-Neb.), who represents a district that is home to a Gallup office, urged him to look into the matter in a March 13 letter.
The lawsuit charges that Scully threatened and intimidated Gallup executives, as well as conspired to prevent them from publicly discussing the CMS' "unlawful government activity."
In addition to the $5 million in damages, the lawsuit requests an injunction to prevent Scully and the CMS from "further violating (Gallup's) constitutional rights, federal law or the HHS rules or regulations."
The controversy heated up after a March e-mail exchange between Scully and Bob Nielsen, Gallup's managing partner for healthcare programs, who became concerned when statements made by NRC/Picker on its Web site and elsewhere seemed to indicate the company's survey would be used as a basis for the CMS survey.
While he declined to comment on the Gallup lawsuit, NRC/Picker Chief Executive Officer Mike Hays said the CMS survey under development is similar to the company's survey in that it uses the same eight dimensions of patient-centered care and focuses on patients' hospital experience instead of only their satisfaction with services.
However, Hays added, "There is no endorsement whatsoever (by the) CMS or AHRQ of NRC/Picker."
On March 5, Nielsen contacted the White House Office of Management and Budget by e-mail, requesting a freeze in funding for the patient-satisfaction survey until it could be determined whether the CMS was unfairly favoring one vendor, specifically Lincoln, Neb.-based NRC/Picker.
In his e-mail to OMB, Nielsen said the collusion between the CMS and NRC/Picker was "blatant," and a "thorough investigation" of the alleged alliance should be conducted before the project proceeded.
The OMB did not cut off funding. However, after seeing Nielsen's e-mail, Scully became infuriated by it and typed a response to Nielsen. In the response, Scully said Nielsen was "out of line-and out of your mind," also calling him a weasel and a jerk. Referring to Nielsen, Scully said in the e-mail that he'd "like to investigate this idiot."
According to Gallup's lawsuit, Scully abused his authority as a federal official, and used "threatening e-mail and correspondence" to suggest that a Gallup executive be investigated. "To have been called names is one thing, but the more serious thing is that we're going to be investigated," said Steve O'Brien, Gallup's general counsel.
"We're not intimidating anyone. We're not investigating anyone," Scully said. "If they want to sue me for sending an e-mail, good luck. ... I got mad and sent a dumb e-mail..."
O'Brien declined to disclose how much of privately held Gallup's business is with hospitals, but did say patient surveys represent "a significant and important part of our overall business."
NRC/Picker's Hays said, "If hospitals are required to use the standard instrument for any kind of regulatory compliance, each hospital would have an opportunity to select whatever vendor they want. ... Other organizations are not as much in favor of a national standard and maybe that's really the debate, albeit couched in other ways."
Scully said it would be at least six months before the CMS issues regulations governing the survey process. The survey AHRQ is developing currently includes 68 questions derived from nine vendors, according to Scully. Three demonstration projects testing the survey are now under way.
"We're trying to get public information out to help patients," Scully said. "We're doing the right thing, and we will continue to do the right thing."