Administrative Procedures

The authority for PRO activities resides in several legislative acts, a broad array of regulations, guidelines, and directives, and various quasiregulatory documents. The practice of relying on Manual transmittals, contracts, and other less formal instructions, instead of promulgating regulations through “public notice and comment” rulemaking as required by the Administrative Procedure Act (APA), has raised serious questions (Jost, 1988). Arguably, HCFA has opened the door to accusations that it is attempting to govern the PRO program through “a continual and confusing stream of instructions [that has] severely hampered their [the PROs’] ability to carry out their mandate” (Jost, 1988) and earned the hostility of those governed by the program. Some experts argue that sound policy reasons support using the more cumbersome process (Jost, 1988). It promotes public participation and fairness to parties who will be affected by the rules; it also forces the agencies to consider their proposals with greater care and to express them clearly.

Legal suits and legislation in the last few years have clarified the situation somewhat, apparently in favor of somewhat more rigorous rulemaking and public procedures.26 Nevertheless, the question of public access to, understanding of, and ability to comment on the myriad rules governing the PRO program remains important. One approach to resolving it might be to appoint a “national advisory council” similar to the one that existed during the PSRO program.

Other or additional options also exist. These include: publishing PRO SOWs and any changes or modifications made during the contract cycle for an abbreviated period for comments; publishing final provisions at least 30 days before their effective date; making PRO contracts, interpretive rules, statements of policy, and guidelines of general applicability available in places of easy public access; and publishing updated lists of these materials every three months. The ACUS argues for even more formal rulemaking procedures “…except when the agency has ‘good cause’ to believe the process is ‘impracticable, unnecessary, or contrary to the public interest’” (Vibbert, 1989c). The national PRO trade association favors the appointment of a “National Peer Review Council” comprising representatives from Congress, HCFA, PROs, providers, Medicare beneficiaries, and academic research. One major assignment would be to develop performance indicators for the PRO program as a whole (Vibbert, 1989e).


Considerable criticism can be leveled at how the PRO program itself is evaluated, especially in terms of its impact on the quality of care. Virtually

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