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Introduction
This introduction provides background on the Institute of Medicine
(IOM) study that produced this report on the Quality Improvement
Organization (QIO) program, the congressional mandate for the study,
and the overall study context. It includes a brief review of a predecessor
report and its implications for the QIO program, as well as a summary of
the methodology used for the present study and an overview of this re-
port's organization.
Section 109 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (P.L. 108-173) requested an evaluation of the
QIO program by the IOM and added new responsibilities for the QIOs
related to the Part D prescription drug benefit included in that legislation.
This study was undertaken in response to that request. It was sponsored by
the Department of Health and Human Services and funded through the
Quality Improvement Group of the Centers for Medicare and Medicaid
Services (CMS), which manages the QIO program. The IOM integrated
this study into its Redesigning Health Insurance project, which was initi-
ated in 2004 to perform in-depth analyses of the structural and finance
mechanisms that can be used to promote health care quality and perfor-
mance improvement. The Committee on Redesigning Health Insurance Per-
formance Measures, Payment, and Performance Improvement Programs
(referred to as the Committee on Redesigning Health Insurance) is the most
recent IOM committee to study health care quality and to build on the
findings and conclusions of two earlier IOM reports--To Err Is Human:
Building a Safer Health System (IOM, 2000) and Crossing the Quality
Chasm: A New Health System for the 21st Century (IOM, 2001). Those
19
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20 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
and the subsequent series of 10 reports, known as the Quality Chasm se-
ries, concluded that the fragmentation of the health care system inhibited
the delivery of high-quality care and that care was not being delivered in a
patient-centered, effective manner. This new series of reports being
produced under the Redesigning Health Insurance project--the Pathways
to Quality Health Care series--builds on the vision of those previous re-
ports by laying out the steps needed to drive fundamental change in the
environmental factors affecting health care delivery to enhance quality and
performance.
The first report of the Committee on Redesigning Health Insurance,
Performance Measurement: Accelerating Improvement, was published in
2005 in response to P.L. 108-173, section 238 (IOM, 2006). That report
offers a set of performance measures that can be used to track improve-
ments in health care quality. It also recommends the creation of a national
system for measurement of and reporting on the quality of health care that
would establish national health care goals, develop standardized measures,
and formulate data collection and public reporting procedures designed to
foster health care quality.
This is the second report produced by the Committee on Redesigning
Health Insurance. Focusing on performance improvement, it considers the
history, role, and effectiveness of the QIO program and its potential to
promote quality improvement within a changing environment that includes
standardized performance measures and new data collection and reporting
requirements.
A third report, like the Performance Measurement report based on sec-
tion 238 of P.L. 108-173, is planned as part of the Redesigning Health
Insurance project. That report will focus on payment strategies that can be
used to incentivize performance and quality improvement and will be pub-
lished in 2006.
BACKGROUND
Health care spending in the United States is higher than that in any
other industrialized country (Reinhardt et al., 2004). Yet the quality
of health care in America is not what it should be, a gap well documented
by the IOM and health policy researchers (IOM, 2000, 2001, 2006). For
example:
· Adults, on average, receive just more than half of the clinical services
known to be beneficial for their conditions and tend to receive many unnec-
essary services (McGlynn et al., 2003).
· Wide disparities exist in the use of health care services and patterns
of health care based on geographic location, the supply of health care ser-
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INTRODUCTION 21
vices, and race and ethnicity (Fisher et al., 2003a,b). Ethnic disparities in
the treatment of Medicare beneficiaries are evident, with minorities receiv-
ing lower-quality mental health and preventive care services, on average,
than whites and Asians (Leatherman and McCarthy, 2005).
· Adverse drug events for patients in hospitals and ambulatory care
settings are a serious problem, and many such events are preventable
(Leatherman and McCarthy, 2005).
· Reporting of serious quality problems in nursing homes varies
widely, ranging from 6 percent of nursing homes cited in one state to 54 per-
cent in another; serious deficiencies are generally understated (GAO, 2006).
· Sicker adults in the United States are more likely to report medical,
medication, and laboratory errors than their counterparts in Australia,
Canada, New Zealand, Germany, and the United Kingdom (Schoen et al.,
2005).
· The United States is among the few industrialized countries that does
not ensure access to health care services for its population; in 2004, 45.8
million people in the United States lacked health insurance (U.S. Census
Bureau, 2005).
· Health information and communications technologies which could
contribute to improved quality are available, but their adoption by provid-
ers has been slow. Among physician practices generally, only 18 percent of
physicians use electronic health records; for those in solo or small-group
practices, the figure is just 13 percent (Miller and Sim, 2004).
These examples illustrate the magnitude of the need to improve the quality
of care offered by all types of providers and practitioners. Medicare can and
should play an important role in meeting this need.
The Medicare program provides coverage for health care services for
an estimated 41.7 million people who are disabled, have end-stage renal
disease, or are aged 65 and older; the program spent more than $295 billion
on benefits in 2004 (CMS, 2004; KFF, 2005). Chronic conditions are com-
mon among the noninstitutionalized Medicare population: 87 percent have
at least one such condition, 36 percent have three or more, and 32 percent
have limitations in activities of daily living (KFF, 2005). Care for patients
with chronic conditions often should, but often does not, include coordina-
tion among practitioners in different care settings and smooth transitions as
patients move from one setting to another.
Medicare, through CMS, currently manages 53 QIO contracts (one for
each state, Puerto Rico, the District of Columbia, and the Virgin Islands;
for simplicity, this report refers to "53 states"). The QIO program is aimed
at improving the quality of Medicare through national oversight and moni-
toring of Medicare services and billing, as well as through state-based ef-
forts in which the QIOs work directly with health care providers (SSA,
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22 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
1935a). The national and state levels of the program are charged with a
variety of functions:
· Improving the quality of care provided to Medicare beneficiaries by
ensuring that providers meet professionally recognized, evidence-based stan-
dards and guidelines.
· Protecting beneficiaries' rights, responding to their complaints, and
investigating evidence of poor-quality care.
· Protecting the Medicare Trust Funds by reviewing claims patterns
and suspicious cases for the inappropriate use of services or incorrect bill-
ing codes.
· More recently, improving prescription drug therapy under the Medi-
care Part D prescription drug benefit (SSA, 1935b; CMS, 2002).
QIOs offer technical assistance to health care providers--including home
health care agencies, hospitals, nursing homes, and physician practices--to
improve the quality of care they offer. QIOs also serve as conveners of and
collaborators with the relevant organizations in their local communities to
promote better-quality care.
The Medicare program includes other quality-related functions, such as
the Survey and Certification of providers to ensure that they meet CMS's
Conditions of Participation. Separate End-Stage Renal Disease Networks,
similar to the QIOs, have quality improvement responsibilities for the care
of beneficiaries who qualify for Medicare because they have end-stage renal
disease. CMS also supports the development, implementation, and report-
ing of quality measures and the development of consumer satisfaction sur-
veys. This report recognizes these other quality activities within CMS but
focuses mainly on the QIO program.
Congressional Mandate for This Study
The legislative request for an IOM evaluation of the QIO program (see
Box I.1) came at a time when the U.S. Congress was examining various
strategies for the promotion of quality improvement within CMS. Congress
mandated that the IOM provide an overview of the QIO program and as-
sess and report on the following:
· The duties of the QIOs
· The extent to which other organizations could perform these duties
at least as well as the QIOs
· The extent to which QIOs improve the quality of care under
Medicare
· The effectiveness of QIO case reviews and other actions
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INTRODUCTION 23
· Funding amounts and sources for the QIOs
· Oversight of the QIOs
The congressional request to IOM did not include a fiscal integrity review.
As noted above, the IOM charged the Committee on Redesigning
Health Insurance with conducting the QIO study. The committee members
BOX I.1 Mandate to the IOM Under the Medicare
Prescription Drug, Improvement, and Modernization Act
of 2003 (P.L. 108-173)
SEC. 109. EXPANDING THE WORK OF MEDICARE QUALITY
IMPROVEMENT ORGANIZATIONS TO INCLUDE PARTS C AND D.
(d) IOM STUDY OF QIOs--
(1) IN GENERAL--The Secretary shall request the Institute of Medi-
cine of the National Academy of Sciences to conduct an evalu-
ation of the program under Part B of Title XI of the Social Secu-
rity Act. The study shall include a review of the following:
(A) An overview of the program under such part.
(B) The duties of organizations with contracts with the Secre-
tary under such part.
(C) The extent to which quality improvement organizations im-
prove the quality of care for medicare beneficiaries.
(D) The extent to which other entities could perform such qual-
ity improvement functions as well as, or better than, quality
improvement organizations.
(E) The effectiveness of reviews and other actions conducted
by such organizations in carrying out those duties.
(F) The source and amount of funding for such organizations.
(G) The conduct of oversight of such organizations.
(2) REPORT TO CONGRESS--Not later than June 1, 2006, the
Secretary shall submit to Congress a report on the results of the
study described in paragraph (1), including any recommenda-
tions for legislation.
(3) INCREASED COMPETITION--If the Secretary finds based on
the study conducted under paragraph (1) that other entities
could improve quality in the Medicare program as well as, or
better than, the current quality improvement organizations, then
the Secretary shall provide for such increased competition
through the addition of new types of entities which may perform
quality improvement functions.
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24 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
have a broad range of expertise in and experience with many aspects of the
health care system and the Medicare program (see the biographical sketches
of the committee members in Appendix E). A subcommittee comprising
individuals with particular expertise in quality improvement issues con-
ducted the data collection and analysis for this study.
In addition to the mandated evaluation of the accomplishments and
limitations of the QIO program, the committee assessed the future of the
program to determine how it can strengthen its role in the new environment
of quality improvement, performance measurement, and payment incen-
tives. The report therefore considers how the QIO program can best con-
tribute to and support growing interest among health plans, purchasers,
providers, and consumers in achieving higher levels of performance and
health care quality as envisioned by the Quality Chasm reports.
The IOM Redesigning Health Insurance Project
Recognizing the deficiencies of the health care system discussed above,
earlier IOM studies proposed six quality aims for U.S. health care: it should
be safe, effective, patient-centered, timely, efficient, and equitable (IOM,
2001). These aims were subsequently incorporated into the CMS Quality
Improvement Roadmap (CMS, 2005).
Inconsistencies in the quality of health care services occur at all levels in
the health care system and among the various types of providers and clini-
cians; the problem is not due simply to a few outliers or the bottom quartile
of providers. Achievement of the six quality aims will require fundamental
reforms within the health care environment that transform relationships at
many levels, including those between patients and clinicians, within health
care organizations, and within the settings in which practitioners function.
The goal of the IOM Redesigning Health Insurance project is to de-
velop structural and financial reforms for public and private health insur-
ance and other health care systems that will result in a greater emphasis on
performance and quality. The committee's reports focus on operational and
finance mechanisms that will speed the elimination of current inconsisten-
cies in health care quality, accomplish the six quality aims cited above, and
promote and reward performance improvement. The changes needed to
achieve these goals encompass performance measurement, the QIO pro-
gram, and payment incentives.
An earlier IOM report on health care quality highlighted the need for
government agencies to pave the way in introducing quality improvements
in the public and private sectors of the health care system (IOM, 2002).
Medicare, as the largest single purchaser of health care and a national leader
in health quality assessment, now has an opportunity to align incentives
within CMS to improve the quality of care throughout the health care sys-
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INTRODUCTION 25
tem by establishing a comprehensive performance measurement and report-
ing system and rewarding selected providers of high-quality care. Not only
could Medicare align these programs now, but it could also promote the
spread of best-care practices through Conditions of Participation, Survey
and Certification requirements, and other regulatory and research authori-
ties, as well as through the QIO program. In addition, Medicare would
greatly magnify its impact by coordinating its policies with those of other
major government programs, such as Medicaid, the State Children's Health
Insurance Program, and the program of the Veterans Health Administra-
tion, as recommended in earlier IOM studies (IOM, 2002, 2006).
Significant opportunities therefore exist for Medicare to create and lead
a coordinated approach to quality improvement that encourages private-
sector participation. Medicare's policies and practices can influence some
private insurers (CMS, 2004). To the extent that private insurers share
Medicare's interest in improving quality and adopt Medicare policies, re-
porting burdens on providers will be reduced, and the potential impact on
quality should be amplified. Private insurers could create comparable and
consistent programs requiring providers to report their performance mea-
sures and could reward quality providers who met certain standards, based
on scientific evidence and the recommendations of this committee. A con-
sistent approach to quality among insurers and purchasers of health care
could hasten the adoption of improvements by providers.
Performance Measurement Report
and Its Implications for the QIO Program
The future of the QIO program is closely intertwined with performance
measurement and reporting and with payment incentives for providers. It is
therefore useful to review the key conclusions and recommendations of the
committee's first report, on performance measurement, as background for
an assessment of the history and the future of the QIO program.
Performance Measurement: Accelerating Improvement was produced
under a separate congressional mandate (section 238) in P.L. 108-173. That
report examined performance measures that could ultimately be used for a
Medicare payment system that would reward providers for quality care.
The study demonstrated that a multitude of measurement sets currently in
use measure the same clinical conditions. However, the specific details of
the measures are frequently inconsistent, creating variations that present
barriers to effective data collection and reporting and unnecessary burdens
on providers. In addition, important areas of care are not yet being mea-
sured, nor do accepted measures yet exist for these areas. The Performance
Measurement report therefore offers a comprehensive strategy that can be
used to overcome these barriers to the use of quality measures in health
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26 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
care. This strategy includes the creation of a National Quality Coordina-
tion Board (NQCB) to facilitate the coordination of functions currently
carried out by various separate organizations, and to take on certain activi-
ties necessary at the national level to enhance performance measurement
and reporting (IOM, 2006). For further detail, see Chapter 3 of the present
report.
The development of a national system for performance measurement
and reporting will require strong national- and community-level infrastruc-
tures to support the efforts of health care institutions and individual provid-
ers to participate in new performance measurement, data collection, and
reporting processes. The committee expects that many providers, particu-
larly physicians in small and solo practices, will need assistance both with
the collection and use of the new measures and with the adoption and imple-
mentation of electronic systems to facilitate record keeping and processes
for the improvement of health care. Translation of the recommendations
offered in the Performance Measurement report into operational procedures
represents a unique opportunity for the QIO program as a whole and its
core contractors to contribute to the development and implementation of
the necessary infrastructure and to help improve the quality of the health
care delivery system. If an infrastructure such as that provided by the QIO
program were not in place nationally, it would be necessary to create one,
because the private market has not met providers' widespread need for as-
sistance in improving quality. This perspective served as a foundation for
the committee's review of the assets and capabilities of the QIO program
and assessment of the program's potential role in contributing to the future
of health care quality improvement.
The committee concluded that the new requirements for health care
performance measurement and reporting may help stimulate the adoption
of electronic health records by many providers; likewise, realignment of the
financial incentives in the health insurance system to reward higher levels of
quality and performance improvement will likely stimulate behavioral and
institutional reforms that will improve the quality of health care delivery.
Yet these strategies are insufficient to create the fundamental transforma-
tion necessary to achieve the six aims of the IOM quality initiative. Many
providers will need technical assistance to help achieve the aims.
As envisioned in the Performance Measurement report, the NQCB will
have seven key functions, most of which could benefit from both the sup-
port of the QIO program and the involvement of QIOs:
· Specify the purposes and aims of the U.S. health care system.
· Establish short- and long-term national goals for improving the
nation's health care system.
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INTRODUCTION 27
· Designate or, if necessary, develop standardized performance mea-
sures for evaluating the performance of current providers and monitoring
the nation's progress toward these goals.
· Ensure the creation of data collection, validation, and aggregation
processes.
· Establish public reporting methods responsive to the needs of all
stakeholders.
· Identify and fund an agenda for research on new measures that can
be used to address existing gaps.
· Evaluate the impact of performance measurement on pay-for-
performance, quality improvement, public reporting, and other policies.
CMS will need to redeploy its resources in the QIO program and be-
yond to support the implementation of a national system for measurement
and reporting and to sustain other performance improvement programs
that are rapidly moving forward for Medicare. In the face of these transfor-
mational changes, the role and the capacity of the QIO program deserve a
critical examination.
AUDIENCES FOR THIS REPORT
This report is intended for multiple audiences, including members of
Congress, the federal executive branch, the QIOs, health care providers and
clinicians, Medicare beneficiaries, and stakeholder groups. Some audiences
will be interested in extensive detail on the QIO program, while others will
want only a brief overview of the program and the committee's findings,
conclusions, and recommendations. Part II of this report was prepared for
those in the former category; in addition, the appendixes to the report in-
clude some of the program details reviewed by the committee, including
previously unpublished data collected specifically for this study. Part I is
intended for those desiring an overview prior to or in lieu of reading the
more detailed treatment in Part II.
STUDY APPROACH
The Committee on Redesigning Health Insurance and the Subcommit-
tee on Quality Improvement Organization Program Evaluation gathered
data on the highly complex QIO program from a wide variety of sources
and compared the conclusions drawn in those sources. The following data
collection methods were used:
· A focused review of the literature on the impact of quality improve-
ment and the QIO program's improvement efforts
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28 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
· The collection of data from all 53 QIOs through the SurveyMonkey
website
· Quantitative analyses of QIOs' relative performance on various tasks
of the 7th scope of work (SOW),1 based on CMS contract performance
evaluation scores
· Site visits by 18 committee members and IOM staff to 11 different
QIOs and one Department of Health and Human Services regional office
· Telephone interviews with the chief executive officers of 20 randomly
selected QIOs
· An in-person focus group discussion with the chief executive officers
of 11 QIOs
· A 3-day briefing by CMS staff, supplemented by specific data re-
quested from CMS
· A half-day public workshop involving members of the committee
and subcommittee, academic researchers, experts on quality improvement
who are working in the field, and other stakeholders
· Access to QIOnet, a CMS internal website for the QIO program that
includes performance data by state
· Face-to-face interviews with representatives of four selected QIOs,
four randomly selected QIO Support Center staff, and the respective chief
executive officers
· Formal and informal discussions with staff and members of the
American Health Quality Association, the national organization that repre-
sents all QIOs
· Informal discussions with representatives of consumer and benefi-
ciary organizations and various providers
· The collection of data at national conferences and meetings related
to QIOs
· Soliciting of suggestions from businesses and other entities providing
QIO-like services
Each of these methods is described in detail in Chapter 6.
Various constraints, such as the timing of the 7th and 8th SOWs and
the budget for this study, made it impossible to build data collection into
1CMS uses the acronym SOW for both "scope of work" and "statement of work." In this
report, the committee uses SOW only for "scope of work" and adopts the general usage of
SOW accepted within the QIO community, in which the term denotes either tasks required in
general or the time period of a contract. When discussing specific details of QIO work, the
committee is referring to the contract itself. For example, the 7th SOW covered the period
from 2002 to 2005. It required all QIOs to provide technical assistance to nursing homes, and
the contract for this SOW stipulated that QIOs must recruit 30 percent of nursing homes to
develop a plan of action.
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INTRODUCTION 29
the QIO contracts: the 7th SOW was under way before the start of the IOM
contract, and the 8th would not be able to produce data in time for the
present study. Timing and budget also precluded travel to all the QIOs. For
the same reasons, the committee was unable to meet federal requirements
to conduct formal surveys of consumers and providers, although it recog-
nized the importance of collecting such data. Furthermore, recent changes
in the operations of the QIO program that occurred after the preparation of
the present report cannot be reflected here. Another constraint was the need
for the IOM to agree to maintain confidentiality to gain access to certain
data from CMS and individual QIO sources; hence, most of the data are
reported in aggregate form and contain no identifiers that could be linked
to a particular QIO or state.
Despite the above limitations, the committee's various data collection
methods as a whole provided a substantial amount of data and informa-
tion. The committee was able to use triangulation to check the consistency
of the findings derived from various sources and methods, and more than
one committee member or IOM staff member was involved with most of
the data collection and analysis. The committee gave greatest weight to the
data collected uniformly from all the QIOs through the web-based tool, to
the telephone interviews used to collect data from a random sample of QIOs,
and to the data for each QIO from the Dashboard section of CMS's internal
website.
ORGANIZATION OF THIS REPORT
As alluded to above, this report consists of two major sections. Part I
consists of five policy-oriented chapters that describe the evolution of the
QIO program (Chapter 1), the main findings and conclusions emerging from
the committee's evaluation of the program (Chapter 2), a summary of Per-
formance Measurement: Accelerating Improvement and its relation to the
QIO program and other entities (Chapter 3), and recommendations con-
cerning QIO program activities and oversight of the QIO program by CMS
(Chapters 4 and 5, respectively).
Part II of this report, Chapters 6 through 13, provides more detail on
the committee's analysis of the QIO program that fulfills the congressional
mandate for this study. It begins by further describing the methods used
for this study (Chapter 6). Focusing on the 7th and 8th SOWs, from 2002
to the present, Part II then provides an in-depth discussion of the QIO
program and its funding, as well as the structure of the state-level organi-
zations (Chapter 7); current program activities and their impacts (Chap-
ters 8 to 12); and CMS oversight of the program (Chapter 13). Collec-
tively, Part II serves as part of the basis for the conclusions and
recommendations presented in Part I. The specific tasks of QIOs in the 7th
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30 MEDICARE'S QUALITY IMPROVEMENT ORGANIZATION PROGRAM
and the 8th SOWs, described in Chapters 8 to 12, encompass technical
assistance for quality improvement, beneficiary education and communi-
cations, and the protection of beneficiaries and program integrity. In Part
II, the committee's evaluation of the program (summarized in Chapter 2) is
woven into the detailed descriptions of the program, which reflect a litera-
ture review, as well as analyses conducted specifically for this study. The
report concludes with several appendixes that present tables with support-
ing data (Appendix A), describe private-sector organizations offering ser-
vices related to quality improvement (Appendix B), review various ap-
proaches to program evaluation (Appendix C), provide a glossary and
listing of acronyms used in the report (Appendix D), and present biographi-
cal sketches of committee members (Appendix E).
REFERENCES
CMS (Centers for Medicare and Medicaid Services). 2002. 7th Statement of Work (SOW).
[Online]. Available: http://www.cms.hhs.gov/qio [accessed April, 9, 2005].
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CMS. July 2005. Quality Improvement Roadmap. [Online]. Available: http://www.
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cember 26, 2005].
Fisher ES, Wennberg DE, Stukel TA, Gottlieb DJ, Lucas FL, Pinder EL. 2003a. The implica-
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sibility of care. Annals of Internal Medicine 138(4):273287.
Fisher ES, Wennberg DE, Stukel TA, Gottlieb DJ, Lucas FL, Pinder EL. 2003b. The implica-
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GAO (U.S. Government Accountability Office). 2006. Despite Increased Oversight, Chal-
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INTRODUCTION 31
Medicare Prescription Drug, Improvement, and Modernization Act. 2003. Medicare Prescrip-
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SSA. 1935b. U.S. Code 42. H.R. 7260, Sections 11511165.
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Representative terms from entire chapter:
quality improvement
