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CMS Eyes Bigger Payoff from Medicare's Quality Improvement Organizations

By John Reichard, CQ HealthBeat Editor

February 8, 2008 -- The Centers for Medicare and Medicaid Services (CMS) said this week it will have its 53 quality improvement organizations concentrate more of their efforts on nursing homes and hospitals that offer the best opportunity for quality improvement. The agency announced the sharpened focus as part of a new set of "QIO" responsibilities that responds to criticism by the Institute of Medicine and the Senate Finance Committee that the organizations need tighter management and structural changes.

"You should not conclude in any way that these are the worst nursing homes or the worst hospitals," acting CMS Administrator Kerry Weems told reporters in a telephone press briefing. Weems emphasized that QIOs would focus on selected quality measures and that facilities targeted might perform well on other measures. That means it wouldn't be fair to hang the label of "worst" on the facilities, he said.

In the case of nursing homes, QIOs will work with facilities to reduce the incidence of bed sores and the practice of using physical restraints to keep patients from wandering, officials said. "Physical restraints" include belts, vests, and wrist devices that restrain movement. Other examples include special chairs and bed side rails. The focus of the work with hospitals will be on preventing post-operative complications such as surgical infections.

While CMS is emphasizing that the facilities aren't the worst performers, the agency is clearly applying public pressure on the targeted facilities to improve. CMS has posted the names of the facilities—some 4,000 nursing homes and some 900 hospitals—on its Web site to help consumers make "informed choices about health care," CMS said in a statement detailing the new duties.

Medicare contracts with QIOs to improve the quality, efficiency and safety of care provided to Medicare patients by hospitals, nursing homes, home health agencies and doctor's offices. QIOs have long enjoyed a strong reputation for quality improvement but in the past few years have encountered skepticism about how they pick the providers they work with and where they place their resources.

The Institute of Medicine released a study in 2006 saying that QIOs should devote more effort to working with providers on processes of care that result in better quality and less time on handing beneficiary complaints. The study also called for greater funding for QIOs and for governing boards that included consumers and a broader variety of health care professionals.

In the same year, Republican Senator Charles E. Grassley of Iowa, then chairman of the Senate Finance Committee, raised a number of questions about salaries paid to QIO executives and board members and about payments for their travel expenses.

The new duties, outlined in a three-year contract with QIOs called the "9th Statement of Work," include several features that aim to keep QIOs on a tighter leash. Instead of evaluating QIOs at the end of their three-year contracts, the organizations will be evaluated quarterly, CMS Medical Director Barry Straub said in the press briefing. If after 18 months a QIO fails to produce quality improvements, CMS can give its contract to another QIO. The new requirements also address the composition of QIO boards, boosting participation by other types of "stakeholders" in addition to doctors, he said.

CMS also is requiring 8 of the 53 QIOs to compete for their contracts in the 9th Statement of Work, which starts August 1. That's because they did meet all the performance criteria outlined in the current contract cycle, the agency said. The QIOs are in California, Minnesota, Mississippi, North Carolina, Nevada, New York, Oklahoma and South Carolina.

In the new contract, QIOs will carry out four types of activities: beneficiary protection, patient safety, prevention, and "care transitions." Beneficiary protection includes reviewing appeals by patients of decisions by doctors on aspects of their treatment. Patient safety will include reducing medication errors and drug-resistant staph infections such as MRSA. Prevention will include increasing mammography, colorectal cancer screening, and increased vaccinations for flu and pneumonia, among other measures. Care transitions includes improving plans of care for patients who move across health care settings.

"It's a good assignment," David Schulke, executive vice president of the American Health Quality Association, said of the new set of responsibilities. Particularly exciting is a requirement for programs in which QIOs will work with doctors, hospitals, home health agencies and nursing homes to coordinate efforts to prevent hospital readmissions, he said.

But Schulke, whose association represents QIOs, said "it throws some curves at providers." For example, many of the approximately 2,000 home health agencies now getting assistance from QIOs will no longer receive it after the current contract ends, he said. In addition, hospitals and nursing homes on the list to be assisted by QIOs are concerned about how they are might be publicly characterized, Schulke said. "The home health providers are upset," as are some of the hospitals and nursing homes, he said. "But I think we can get past all that." Schulke sees some room, for example, for home health agencies to participate in programs to prevent hospital readmissions.

Under the new approach, CMS rather than QIOs are selecting the providers that will receive assistance. Straub said the perception has been that QIOs have selected providers that are easier to work with, not necessarily those in greatest need of help. The new contract calls for CMS to pick 85 percent of the providers and QIOs 15 percent.

Schulke calls the providers that now receive assistance "typical" rather than the worst performers and the best performers. "You work with people that are willing to work with you," he said. In some cases the worst performers are in management turmoil, he added. Thus a management team might agree to work with the QIO, only to be replaced by managers who don't want to cooperate.

While the IoM report called for giving QIOs greater resources to carry out their duties, the Bush administration has proposed a 13 percent cut in funding for the QIOs, Schulke noted. "We think it's troublesome because the work is very demanding," Schulke said.

The work will be worthwhile, said the American Cancer Society Cancer Action Network. "The decision to include screenings for breast cancer, the most frequently diagnosed cancer in women, and colorectal cancer, the third most common cancer in both men and women, is evidence CMS is placing newfound emphasis on preventive medicine," the network said in a statement.

It also noted that CMS, in its voluntary pay-for-performance system, is tying higher payments for doctors to the use of certain practices, such as improved cancer screening and greater counseling of patients to avoid tobacco use. "Medicare is setting an extraordinary precedent that will be of enormous benefit to its more than 41 million patients," said Daniel E. Smith, the president of the network.

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