Medicare

GAO discussed peer review organizations' (PRO) effectiveness in assessing the quality of care Medicare beneficiaries received at health maintenance organizations (HMO). GAO noted that: (1) the Health Care Financing Administration's (HCFA) PRO review program did not ensure that Medicare beneficiaries received adequate care; (2) HCFA did not ensure that internal quality assurance programs effectively identified and corrected quality-of-care problems; (3) HCFA made PRO review optional for some HMO, and most HMO elected not to have their quality assurance activity reviewed by PRO; (4) PRO external medical records review did not provide a valid quality-of-care assessment, since PRO did not have access to comprehensive HMO data from which to select their review samples; (5) HCFA did not use PRO review results in its own HMO compliance monitoring process; (6) HCFA recently proposed a new PRO review methodology to correct some of the identified problems; and (7) the HCFA proposal did not address the underlying data problems of the PRO/HMO review program.