Currently, the Medicare program reimburses only for care provided in health maintenance organizations (HMO) and by the fee-for-service sector. Concerned about ensuring quality in managed care plans that have not participated in Medicare, the Chairman of the Subcommittee on Health of the House Committee on Ways and Means requested that GAO (1) discuss the present and future strategies of the Health Care Financing Administration (HCFA), which administers the Medicare program, to ensure that Medicare providers furnish quality health care, in both fee-for-service and HMO arrangements and (2) obtain experts’ views on desirable attributes of a quality assurance strategy if more managed care options are made available to Medicare beneficiaries. Encourage continuous quality improvement. Make information about providers available to beneficiaries and others in a useful and understandable way. HCFA plans to modify its quality assurance strategies to emphasize outcomes and improvement in the quality of care. Ultimately, the agency has the authority to suspend Medicare payment to substandard providers. Until recently, these strategies were based on a regulatory approach—setting minimum standards for health care organizations and implementing systems to identify and discipline substandard providers. The Medicare Provider Certification Program, in existence since Medicare’s inception in 1965, is directed at ensuring that fee-for-service institutional health care providers serving Medicare beneficiaries meet minimum health and safety requirements. This program was established to ensure that HMOs with contracts to serve Medicare beneficiaries meet minimum financial and structural standards. Inadequate Enforcement of Medicare HMO Quality Assurance Requirements

We have criticized HCFA for failing to aggressively enforce Medicare quality assurance requirements for HMOs. The Medicare Peer Review Organization (PRO) Program

HCFA’s medical record review strategy, implemented through the Medicare PRO program, was designed to identify providers whose care does not meet recognized medical standards. HCFA’s new strategy, called the Health Care Quality Improvement Program, is founded on the premise that HCFA should try to buy the best care possible for Medicare beneficiaries and is generally consistent with many of the elements of appropriate quality assurance strategies cited by the health care experts we interviewed. The strategy should use many measures to evaluate care.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Health Care Financing Administration's (HCFA) efforts to enhance the quality of care for Medicare beneficiaries, focusing on: (1) the strategies to ensure that Medicare providers furnish quality health care, in both fee-for-service providers and health maintenance organizations (HMO); and (2) experts' views on desirable attributes of a quality assurance strategy if more managed care options are made available to Medicare beneficiaries.

What GAO Found

GAO found that: (1) HCFA monitors the quality of care in the Medicare program and has the authority to require corrective action or withhold Medicare payments from substandard providers; (2) Medicare's quality assurance strategies include setting minimum standards for health care organizations and implementing systems to identify and discipline substandard fee-for-service providers and HMO; (3) the Medicare Provider Certification Program ensures that fee-for-service institutional health care providers serving Medicare beneficiaries meet minimum health and safety standards; (4) the Medicare HMO Qualification Program ensures that HMO with contracts to serve Medicare beneficiaries meet minimum financial and structural standards; (5) HCFA has failed to enforce Medicare quality assurance requirements for HMO; (6) the HCFA medical record review strategy, implemented through the Medicare Peer Review Organization (PRO) Program, identifies providers whose care does not meet recognized medical standards; (7) the new HCFA quality assurance strategy, called the Health Care Quality Improvement Program, tries to buy the best care possible for Medicare beneficiaries and reflects state-of-the-art quality assurance practices; (8) experts believe that programs designed to ensure quality care provided to Medicare beneficiaries through a variety of managed care arrangements should build on existing efforts, use many measures to evaluate care, encourage continuous quality improvement, and make information about providers available; and (9) the dubious nature of previous quality assurance implementation efforts raises concern about its ability to implement its new quality assurance strategy.