Doctors fear bill would resurrect punitive Medicare claims reviews

A new breed of largely unregulated contractors would be tasked with finding quality, payment, utilization and coverage problems.

By David Glendinning, AMNews staff. Aug. 27, 2007.

Washington -- Physicians who thought they bade good riddance years ago to Medicare's oft-maligned peer review organizations are nervously eyeing new legislation in Congress that they say would bring back the bad old days of claims review.

Senate Finance Committee Chair Max Baucus (D, Mont.) and Ranking Republican Charles Grassley (Iowa) have introduced a quality improvement bill that would create a new group of contractors called Medicare provider review organizations, or MPROs. Although not the same as the PROs of old, they would accomplish the same purpose -- investigating complaints about physicians and other Medicare participants by reviewing claims data to determine if the care in question was medically necessary and provided appropriately.

Medicare quality improvement organizations, which replaced the peer review system in the early 1990s, currently handle such evaluations. But they also work directly with physicians, hospitals and others on proactive quality improvement initiatives that are not from any investigation. The QIOs, whose boards are typically made up mostly of physicians, use much of their Medicare money to help doctors implement better care systems before any trouble arises.

This dual role has caused Baucus and Grassley to push their legislation. While the bill would enhance QIOs' quality improvement activities, it would strip away their case review responsibilities and assign them to the new MPROs. The lawmakers repeatedly have said the QIOs' desire to maintain good working relationships with their quality improvement partners causes the organizations to go too easy on physicians and hospitals that demonstrate quality, payment, utilization or coverage problems.