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QIOs Prep for Big Changes

 |  By cclark@healthleadersmedia.com  
   May 15, 2014

By revamping its Quality Improvement Organization program, the Centers for Medicare & Medicaid Services will put an end to a fundamental flaw in the old structure, which exposed contractors to accusations of conflict of interest.

It's taken 10 years, an Institute of Medicine report requested by Congress, two critical evaluations from the Office of Inspector General, and a 2011 federal law. But finally, the albatross of conflict of interest is being removed from the neck of the federal Quality Improvement Organization program.

The network of 53 federally contracted companies, which collectively received $1.65 billion in federal funds over the last three years, will undergo a massive upheaval starting Aug. 1.

The restructuring, announced by the Centers for Medicare & Medicaid Services this month, aims to end an era in which the same QIO performed two conflicting functions:

  • The process of receiving and investigating beneficiaries' complaints about care, malpractice, or fraud, which could lead to notification to federal authorities if the issue involves fraud or "gross or flagrant" provider behavior
  • The recruitment of providers and healthcare systems for voluntary collaborative improvement programs, such as to reduce readmissions or infection rates.

A Wall Goes Up
The restructuring creates two completely separate systems by essentially erecting a wall between the handling of two potentially competing QIO responsibilities.

"Congress has always been uncomfortable with this dual mission, that we're supposed to hold providers accountable on one hand, and then ask them to be recruited for quality improvement initiatives on the other," says Jane Brock, MD, former chief medical officer for the Colorado Foundation for Medical Care, the QIO serving Colorado. She is now with another QIO, Telligen, which serves Illinois.

For example, Brock says, "letters notifying a provider about a complaint review—what we call ding letters—come on the same letterhead as the recruitment materials for quality improvement initiatives. That's been a source of contention for as long as I've been with the program."

IOM Report Finds Conflict
That's pretty much what the IOM committee thought when it issued its 543-page report:

"Beneficiary complaints should be reviewed under a contract that recognizes the beneficiary as the primary client," the IOM committee said. "CMS and the QIOs themselves, as mentioned during the committee's site visits, currently recognize providers as the primary client of the QIO program…Again, working collaboratively with providers and investigating their activities within a single contract can create an inherent conflict of interest for the QIOs."

And there was more. It turns out that the IOM investigators found that beneficiaries who complained about a provider to a QIO told surveyors they were highly satisfied with the process, but not with the outcome of their complaint.

Is There a Problem Here?
Asking around this week, I could find no one to document an actual case of a QIO conflict beyond the appearance of one. Brock says she never perceived a conflict in her many years of working with the Colorado QIO.

At other QIOs, when the potential for conflict arose, I'm told those organizations usually contracted with another state's QIO to do the investigation.

Imagine being a patient, trying to file a complaint with a QIO because the hospital failed to protect your mother from falling and breaking her hip, only to find that the same office had recruited the same hospital to volunteer for a fall prevention program, about which both the hospital and the QIO had just boasted resounding success.

"That's truly it," says Patricia Merryweather, executive director of Telligen. "If you're working on an improvement initiative in a hospital, you know the hospital, you're developing a relationship."

"But on the other side, you have beneficiaries calling in and complaining, and identifying issues that they were wronged or harmed, and it does create, from a beneficiary's perspective, a perceived conflict."

Lack of Data Transparency
The American Hospital Association's Nancy Foster, vice president for quality and patient safety policy, says that CMS's announcement is a "fulfillment of the recommendations" from the OIG's 2006 report, and one the AHA fully supports. "We will do all we can to help CMS determine if these changes lead to the intended results or need further tweaking," she said in an e-mail.

Whether there really has been any conflict of interest in the QIO function is tough to know.

That's because data collected by QIOs from patient charts or hospital records, which might show that a provider has engaged in "gross and flagrant" behavior, is kept confidential and protected from discovery, subpoena, or disclosure.

"It's protected by the peer review statute [so] the QIOs can engage with providers to identify issues and pursue improvement," explains Todd Ketch, executive director of the American Health Quality Association, which represents all 53 current QIOs.

That protection is controversial, of course.

Leah Binder, president of the Leapfrog Group, which publishes quality and safety scorecards for hospitals, said in an e-mail, "the problem with QIOs and quality improvement efforts is the deliberate absence of transparency. Yet where we see breakthroughs in quality improvement, invariably data and progress were made publicly available. Examples are [reductions in] early elective deliveries and central line-associated bloodstream infections."

Many Jobs Eliminated or Moved
CMS's overhaul is most certainly a dramatic one, and not only because it completely separates the QIO's two main functions. Regionalization will also in effect abolish the contracts CMS has with the 53 organizations now working in their own states in those dual roles.

The result could be a loss of jobs for hundreds if not thousands of QIO workers around the country, many of them physicians who review complaints and quality efforts. Some QIO companies will likely dissolve or find another market for their work.

But there will be some new jobs. The QIO restructuring will undoubtedly spawn new companies that bid for regional work instead of in a single state. Those contracts will last five years instead of three, and will cost $4 billion instead of $1.6 billion.

The first system to roll out of CMS is the Beneficiary and Family-Centered Care program, which will handle beneficiary complaints, or "case review and monitoring activities." Instead of being carried out within each of the 53 organizations, two contractors will handle beneficiary complaints for the entire country, divided into five regions.

Livanta, LLC of Annapolis, MD, will handle complaints about providers in two regions, including 18 states in western and north Atlantic states, plus Puerto Rico and the Virgin Islands. The currently contracted QIO for Ohio, KePRO, will investigate complaints beneficiaries submit about providers in three regions, which include the remaining states and the District of Columbia.

In July, CMS will award contracts for the second part of QIO function, working with providers on voluntary quality improvement initiatives. Here too, there will be dramatic consolidation. Replacing the 53 QIOs that each represent one state or territory will result in between nine and 18 organizations that each represent between three to six states.

And there will likely be another casualty of consolidation — the potential loss of local connections with hospitals and other providers in each state. So it's important for CMS to make sure its contractors though CMS for its contractors to maintain representation in towns and cities, and not try to grapple with issues from thousands of miles away.

As it writes these new contracts, CMS must take care to make sure that doesn't happen. There could be some serious loss in quality improvement if that happens.

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