ournal of HealthCare Compliance

Aspen Publishers, Inc. . Volume 2, Number 2 .

PRO Sixth Statement of Work Focuses onQuality CompliancePROs to Initiate Payment Error Prevention ProgramUsing federal prosecution of health care fraud As a result, quality-of-care compliance must

as the impetus, hospital compliance programs become a priority focus for health care compliancefocus almost exclusively on the prevention of officers. In this context, peer review organizations

financial health care fraud (upcoding, embezzle- (PROs) are perfectly positioned to assist compliancement, bribery, kickbacks, and the like) while paying officers in their quality-of-care compliance programs.less attention to clinical care compliance issues. The PR

O S f W rkrecent release of the tatement 0 0

Institute of Medicine On March I, 1999, thereport on medical errors The 6S0W also provides Health Care Financinghas focused attention on . . Administration released itsthe prevalence of sub- opportunities for PROs to engage triennial request forstandard health care. Yet alternative care providers in quality proposal (RFP) for first-medication errors are not round PROs.! Whilethe only evidence of poor improvement projects and focus maintaining the focuscare. There ~~e o~ers: attention on disadvantaged ~pon.. UnderubhzatlOn of InpatIent

health care services is populations. hospitalfast becoming the acute carefavorite whipping boy qualityfor prosecutors. improvement projects, traditional. Nursing homes are under siege for failing to case review, and beneficiary out-provide adequate oversight, staffing, and services reach, the Sixth Statement of Workto frail elderly residents. (6S0W) includes opportunities for

. Missouri's attorney general is suing Medicaid PROs to engage alternative care .managed care plans for failing to provide lead settings and Medicare HMOs in Sarah A. Grimscreening services to indigent infants and chil- quality improvement projects. Indren in St. Louis. addition, the Payment Error

Sarah A. Grim, MHA, CHE, is chief executive officerof the Missouri Patient Care Review Foundation. Shecan be reached at 800/735-6776 or by e-mail atmopro.sgrim@sdps.org. Gregg Laiben, MD, medicaldirector, and Lori Schieferdecker, LPN, clinical reviewmanager at the Missouri Patient Care Review Foun-dation, contributed to this article.

Volume 2, Number 2 . Journal of Health Care Compliance

March/April 2000 Roy Snell, Editor

Prevention Program will enlist the PROs in healthcare fraud prevention activities. This column takes acloser look at what PROs will be doing under the newstatement of work.

Task 1: National Quality Improvement Projects

PROs will continue in their role as "changeagents" in the quality improvement arena. Thisbuilds upon the Health Care Quality Improvement ~

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Initiative (HCQII) with its National CooperativeCardiovascular Project (CCP), as well as the FifthStatement of Work successor, the Health CareQuality Improvement Program (HCQIP).

HCQII's success rested upon the ability of PROs tocollaborate with the provider and practitionercommunity to achieve measurable improvement inhealth care quality. The Fourth Statement of WorkPRO contract implemented the first national qualityimprovement project approach while allowing PROsto develop their own local projects. Now, HCFA isrequiring all PROs to participate in six nationalclinical projects, with local projects now relegated totask 2 activities. The six clinical topic areas are acutemyocardial infarction (AMI), heart failure, pneumo-nia, stroke/TIA/atrial fibrillation, diabetes, and breastcancer (see chart, page 75).

Hospital and physician participation in task 1national quality projects, while voluntary, is aquality care compliance indicator.

Task 2: Local Quality Improvement ProjectsThe 6S0W also provides opportunities for PROs

to engage alternative care providers in qualityimprovement projects and focus attention ondisadvantaged populations. Under local qualityimprovement projects, both a specific setting and aspecific population will be targeted for limited-scopequality improvement projects.

The second component of Task 2 is a project fordisadvantaged Medicare beneficiaries. This project isexpected to reduce the disparity between carereceived by beneficiaries who are members of adisadvantaged group and all other beneficiaries inthe state. Among targeted disadvantaged popula-tions are minorities and Medicare/Medicaid "dualeligibles. "

Under a recently issued memorandum fromHCFA, PROs will select settings and topics fromamong a list of HCFA priorities. The settings includeskilled nursing facilities (SNFs), home health agencies(HHAs), end-stage renal disease facilities (ESRDs), andphysician offices. As with all PRO quality improve-ment projects, an alternative setting project musthave clearly stated project goals and objectives (seechart).

Alternative care provider and physician participa-tion in the alternative care setting project, whilevoluntary, is a quality care compliance indicator.

Task 3: Quality Improvement Projects in Con-Junction with M+C Plans

Beginning on January I, 1999, Medicare+Choice(M+C) plans are required to implement qualityimprovement projects as part of the Quality Im-provement System for Managed Care (QISMC)standards. The plans must achieve demonstrable

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and sustained improvement in significant aspects ofclinical care and nonclinical services. (InterimQISMC standard 1.1.2 at Attachment J-6 of 6S0WRFP).

Each M+C plan must initiate a certain number ofquality improvement projects, including a HCFA-directed national project. Diabetic care is the firstsuch project. Other projects will be selected by theplan on a topic that targets the special health careconcerns of its enrollees.2

M+C managed care plan participation in QISMCis mandatory. Collaboration with PRO projects is aquality care compliance indicator.

Journal of Health Care Compliance. March/April 2000

Task 4: Payment Error Prevention ProgramUsing the DIG audit opinion of HCFA's 1996

and 1997 financial statements as an impetus forchanging the 6S0W, HCFA is directing all PROs toinitiate a Payment Error Prevention Program orPEPP. The purpose of PEPP is to reduce the occur-rence of payment errors. Specifically PEPP is di-rected to inpatient hospital PPS services andincludes correct coding as well as the provision ofunnecessary services. This latter category willinclude short-stay hospitalizations and unneces-sary admissions.

While HCFA continues to make progress inreducing the level of improper Medicare payments,inpatient hospital services account for the majorityof payment errors. Almost 80 percent of all incorrectpayments occur in these areas:. inpatient hospital services (26%);. physician services (25%);. home health agencies (13%); and. outpatient hospital services (13%).3

According to the DIG, most coding errors fall

into four general categories and account for a setpercentage of the error rate nationally: insufficientor no documentation errors (17%), lack of medicalnecessity (50%), incorrect coding (18%), andnoncovered or unallowable services (15%).4

PEPP is intended as an educational strategy toreduce payment errors. This strategy will identifyareas of improvement through:. monitoring of hospitals for coding and utiliza-

tion compliance; and. development of interventions to reduce payment

errors.Hospital participation in PEPP is mandatory.

Participation is a compliance indicator.

Task 5: Other Activities

Both. the law and the regulations require PROs toconduct a number of activities including traditionalcase review, post review activities, convocation andattendance at certain meetings, communication withbeneficiaries and providers, and other routine' ,.'-

responsibilities.

Provider, physician, and plan participation inTask 5 medical review activities is mandatory. Coop-eration is a compliance indicator.

Conclusion

Quality of care compliance cannot remain thepoor stepchild of the health care compliance indus-try. Payers and employers are demanding moreinformation about health care quality while strivingto eliminate health care fraud and abuse. The 6S0Wquality projects will build a powerful nationaldatabase on quality care compliance among thenation's providers, physicians, and health plans. Indoing so, the database may enable HCFA to selec-tively contract, over time, with the quality compliantorganizations and clinicians while limiting theparticipation of those who do not adhere to qualityimprovement compliance programs.

An electronic copy of the March I, 1999, 6S0Wis available on the HCFA Web site at

Reprint from Journal of Health Care Compliance, March/April 2000, 2(2), pages 73-75 with permission fromAspen Publishers Inc., Gaithersburg Md., 800/638-8437. Copyright <0 2000.

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www.hcfa.gov/quality/qIty-Sb.htm along withother pertinent information about peer revieworganizations. lHCCThis article was prepared by the Missouri Patient Care ReviewFoundation under a contract with the Health Care FinancingAdministration (HCFA). The contents do not necessarily reflect HCFA

policy.

References1. HCFA divides the 53 peer review organizations into three groups for each

Statement of Work Request for Proposal. For purposes of the 1999 6S0WRFP, HCFA Round 1 PROs were requested to submit applications byMarch 31, 1999, while Round 2 and Round 3 PROs submitted proposalsin June 1999.

2. Health Care Financing Administration, Sixth Statement of Work Request forProposals for PROs (March 1, 1999): 32.

3. Ibid., DaIle 5.4. "Testimony of MIke Hash, deputy administrator, HCFA. on the 1998 CFO

audit of HCFA Before the House Committee on Government Reform,Subcommittee on Government Management, Information, andTechnology," March 26, 1999.

S. Health Care Financing Administration, OCSO TOPS Control #99-22 "Task2.1 Alternative Settings Memorandum" (October 29, 1999).

Healthjournal of Care Compliance. March/April 2000