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Date: March 9, 2006
Contacts: Christine Stencel, Media Relations Officer
Chris Dobbins, Media Relations Assistant
Office of News and Public Information
202-334-2138; e-mail <>


Reform and Restructuring of Quality Improvement Organizations Needed
To Achieve National Goals for Improving Health Care

WASHINGTON -- Quality improvement organizations (QIOs) -- the private groups that contract with Medicare to help health care organizations and practitioners improve the quality of their services -- would be more effective if they focused solely on providing technical assistance on quality improvement, says a new report from the Institute of Medicine of the National Academies. The Centers for Medicare and Medicaid Services (CMS), which manages the QIO program, should transfer other activities, such as case reviews, to other organizations, said the committee that wrote the report.

The report is the result of a yearlong review of QIOs' organizational structures, responsibilities, and role in improving the quality of health care. Currently, Medicare contracts with 41 organizations to help promote better care for beneficiaries in each state. QIOs are also required to examine patient complaints and requests for coverage and to review claims to make sure that care meets national quality standards and guidelines and that Medicare has been billed appropriately for the services reimbursed.

The committee noted that the expansion of public reporting on the performance of health care organizations, along with the growth of incentive programs designed to raise quality levels, will increase demand by health care providers for the type of expert assistance that QIOs offer. To meet this anticipated surge in demand, QIOs should concentrate on helping providers improve their delivery of care and their organizational cultures and information systems, instead of handling beneficiary complaints, appeals, and other case reviews, the report says.

"We believe that the care provided to Medicare beneficiaries has improved too slowly and that QIOs should concentrate on accelerating these improvements," said committee chair Steven Schroeder, Distinguished Professor of Health and Health Care, University of California, San Francisco. "While we recognize the importance of the proper handling of beneficiary complaints and case reviews, these organizations have not yet realized their full potential to help health care providers meet the highest quality standards. The role of QIOs should be to improve health care practice rather than to supervise or regulate it."

CMS should contract with a few selected QIOs or other groups that have expertise in investigating medical complaints to handle Medicare beneficiary claims and appeals. This redistribution of responsibilities would address perceived or real conflicts of interest that may arise when such reviews are conducted by the same QIO that also must maintain good relationships with health care facilities that participate voluntarily in its quality improvement programs. It would also make better use of available resources.
It is unclear whether the QIO program's budget of $1.265 billion for its current three-year contract period will be sufficient to meet the likely increased demand for technical assistance in the future and to promote needed improvements, the report notes. To inform decisions on how future funding can be spent most effectively, more rigorous evaluations of the program and of specific methods to improve health care quality are needed. The current funding for the QIO program amounts to less than 0.1 percent of Medicare's total budget.

In addition, the committee recommended that QIOs' governing board structures be strengthened. Most boards are heavily dominated by physicians and rarely have more than one patient representative. To achieve greater balance, the boards should include more representatives of other health care fields and consumers as well as members with expertise in health information technology. Making public the names of the members of QIOs' boards and disclosing information on their compensation would increase transparency of operations and foster greater trust, the committee said.

Requested by Congress and sponsored by the Centers for Medicare and Medicaid Services, this report is the second in a series that focuses on the redesign of health insurance to accelerate the pace of quality improvement efforts in the United States. A previous report discussed ways to measure and report on health care providers' performance, and a third report will examine payment incentives to improve the quality of health services. The Institute of Medicine is a private, nonprofit institution that provides health policy advice under a congressional charter granted to the National Academy of Sciences. A committee roster follows.

Pre-publication copies of Medicare's Quality Improvement Organization Program: Maximizing Potential are available from the National Academies Press; tel. 202-334-3313 or 1-800-624-6242 or on the Internet at Reporters may obtain a copy from the Office of News and Public Information (contacts listed above).

[ This news release and report are available at ]

Board on Health Care Services

Committee on Redesigning Health Insurance Performance Measures,
Payment, and Performance Improvement Programs

Steven A. Schroeder, M.D. (chair)
Distinguished Professor of Health and Health Care
University of California
San Francisco

Bobbie Berkowitz, Ph.D., R.N., F.A.A.N.
Chair and Professor
Psychosocial and Community Health
University of Washington

Donald M. Berwick, M.D., M.P.P.
President and Chief Executive Officer
Institute for Healthcare Improvement
Cambridge, Mass.

Bruce E. Bradley, M.B.A.
Director, Health Plan Strategy and Public Policy Health Care Initiatives
General Motors Corp.
Pontiac, Mich.

Janet M. Corrigan, Ph.D.
President and Chief Executive Officer
National Committee for Quality Health Care
Washington, D.C.

Karen Davis, Ph.D.
Commonwealth Fund
New York City

Nancy-Ann Min Deparle, J.D.
Senior Adviser
J.P. Morgan Partners LLC
Washington, D.C.

Elliott S. Fisher, M.D., M.P.H.
Professor of Medicine and Community Family Medicine
Dartmouth Medical School
Hanover, N.H.

Richard G. Frank, Ph.D.
Margaret T. Morris Professor of Health Economics
Harvard Medical School

Robert S. Galvin, M.D.
Corporate Health and Medical Programs
General Electric Co.
Fairfield, Conn.

David H. Gustafson, Ph.D.
Research Professor of Industrial Engineering
University of Wisconsin

Mary Anne Koda-Kimble, Pharm.D.
Professor and Dean
School of Pharmacy
University of California
San Francisco

Alan R. Nelson, M.D.
Special Adviser to the Executive Vice President
American College of Physicians
Fairfax, Va.

Norman C. Payson, M.D.
NCP Inc.
Concord, N.H.

William A. Peck, M.D.
Center for Health Policy
Washington University School of Medicine
St. Louis

Neil R. Powe, M.D., M.P.H., M.B.A.
Professor of Medicine, Epidemiology, and Health Policy
Johns Hopkins University School of Medicine and Bloomberg School of Public Health

Christopher Queram, M.H.A.
President and Chief Executive Officer
Wisconsin Collaborative for Healthcare Quality
Robert D. Reischauer, Ph.D.
Urban Institute
Washington, D.C.

William C. Richardson, Ph.D.
President Emeritus
Johns Hopkins University, and
W.K. Kellogg Foundation
Battle Creek, Mich.

Cheryl M. Scott, M.H.A.
McClintock-Scott & Partners

Stephen M. Shortell, Ph.D.
Blue Cross of California Distinguished Professor of Health Policy and Management, and
School of Public Health
University of California

Samuel O. Thier, M.D.
Professor of Medicine and Professor of Health Care Policy
Harvard Medical School and Massachusetts General Hospital

Gail R. Wilensky, Ph.D.
Senior Fellow
Project HOPE
Bethesda, Md.


Rosemary Chalk
Study Director