Medicare

In the past decade, Medicare costs have risen on average more than 10 percent per year. Expanding managed care options for Medicare patients has been proposed as a way to contain costs. Concerns have been raised, however, that such changes may undermine the quality of care provided to Medicare beneficiaries. Currently, Medicare reimburses only for care provided in health maintenance organizations and by the fee-for-service sector. This report (1) discusses the present and future strategies of the Health Care Financing Administration, which administers the Medicare program, to ensure that Medicare providers furnish quality health care, in both fee-for-service and health maintenance organization arrangements and (2) provides the views of experts on attributes a quality assurance program should have if more managed care options are made available to Medicare beneficiaries.

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.