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QIOs Taking
a Big Budget Cut in 03?
Among the sharpest
drops in funding in the Bush Administration's proposed 2003 budget for the Medicare
program is a $127 million reduction in funding for Peer Review Organizations,
which perform a range of functions to assure and improve quality of care. But
a Centers for Medicare and Medicaid Services spokesperson says the decline from
$535 million in funding for 2002 to $409 million in 2003 is not what it seems.
Next year marks the third year of a three-year funding cycle for PROs that is
lowest in its first year, highest in the second year, and then declines somewhat
in the third year, the spokesperson says.
Thus PROs, whose
name changes this year to "Quality Improvement Organizations," aren't
about to see their quality assurance responsibilities pared back as the $127 million
decline might imply. The three-year up-and-down pattern of funding reflects the
pace at which CMS is able to negotiate three-year contracts with PROs to perform
their functions, the spokesperson says.
That's not to say
that PROs are happy about their budget outlook, however. The '03 funding for the
most part reflects completion of work on the so-called "Sixth Contract;"
efforts are now under way to develop the Seventh Contract enumerating PRO responsibilities
over the next three-year period. In comments on a proposed version of that contract,
the American Health Quality Association, which represents PROS, said in December
that "is a highly ambitious statement of work, even under the best of circumstances."
AHQA Executive
VP David Schulke told WHB this afternoon that "the workload is substantially
greater" in the seventh contract but that funds the PROs - now QIOs - themselves
get will be substantially lower. Schulke said the total over three years for the
sixth contract was $725 million, and the total for the seventh contract will be
$644 million. Schulke noted that these funds aren't actually appropriated, but
are drawn from the Medicare Trust Fund in sums negotiated between CMS and the
White House Office of Management and Budget.
Some aspects of
the proposal for the seventh contract may not be feasible, said AHQA. CMS seems
to anticipate extraordinary savings from collaborations with nursing homes and
home health agencies yet the relationships allowing that to occur haven't really
been developed, said AHQA. CMS says that the next round of three-year contracts
will be worth about $1 billion, but Schulke says that includes funds QIOs themselves
don't get.
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