September 13, 2001 Bill Rollow, MD Deputy Director Quality Improvement Group Office of Clinical Standards and Quality Center for Medicare & Medicaid Services Room S3-02-01 7500 Security Blvd. Baltimore, Maryland 21244-1850 Dear Dr. Rollow: I am writing on behalf of the American Health Quality Association (AHQA) to provide suggestions for restructuring the standards and processes used by the Center for Medicare and Medicaid Services (CMS) to certify PRO-like entities. This letter supplements our December 13, 2000 letter to Dr. Kang (letter enclosed), stating several concerns with the current PRO-like entity certification process, and providing some rationale and suggestions for change. As you are aware, PROs provide a great deal of knowledge, experience and accountability to the State Medicaid programs, largely due to the following attributes Congress and CMS have demanded of the PROs: Strong ties to the physician community in each State. Strict requirements to avoid conflict of interest. Continuous monitoring of fiscal responsibility through internal and external audits. Demonstrated experience in the field or a documented plan for accomplishing new work. Documented internal quality control process (IQC). Periodic recertification based on a performance-based evaluation. Under Federal law, the designation "PRO-like" triggers the release of enhanced Federal matching payments to States. States may use entities that lack the "PRO-like" designation to accomplish various purposes under the Medicaid program, but they are not entitled to the enhanced Federal payments if they do so. Under the law, and as a matter of good stewardship of tax dollars, CMS is obliged to ensure this designation is conferred only when the agency is certain that an entity will provide a "PRO-like" level of responsibility and accountability. "PRO-like" entities should meet requirements to ensure they consistently meet peer review standards that are basic requirements for PROs under current law. We acknowledge that "PRO-like" entities should not be required to satisfy all of the stringent requirements and expert qualifications that the PROs must possess for their Medicare work. However, both to ensure Federal funds are properly spent and to provide for fair competition, the initial certification requirements of "PRO-like" entities should require evidence the entity is competent to provide the services, the entities should be periodically recertified, and their recertification process should depend on an assessment of their performance. We offer the following specific recommendations. Initial Certification. CMS should establish an initial certification process that involves a formal application for each State in which the entity wishes to provide "PRO-like" services. The certification process should require the entity to provide to CMS evidence that the entity satisfies certain essential requirements. Among these, the entity must: Meet the minimum standards for a PRO as a physician-access organization for each State they intend to serve. This includes the requirement that they are not a health care facility, an association of health care facilities, a health care facility affiliate or any other type of provider or payer (as in PRO Manual, Part 2). Have documented capability to do the work, or failing this, offer a detailed plan as to how they would perform peer review activities. Describe their "PRO-like" staffing for each State in which they intend to do business, with job descriptions and resumes for key positions such as physician reviewer, management staff, registered nurse, abstractor, and data analyst. Describe staff training systems or other documentation regarding staff training. Document the entity's internal quality control process (IQC). Document their current confidentiality protection processes, and their plan to become HIPAA compliant. Provide their conflict of interest policy, and agree to annually submit to CMS a list of current private and public business contracts. Provide a list of their Board of Directors that includes documentation regarding any sanctions or OIG corporate integrity agreements (as in PRO Manual, Part 2). Submit their previous annual audited financial statement, and agree to submit subsequent statements to CMS annually. Recertification process. CMS should establish a recertification process under which "PRO-like" entities must: Submit an application for and receive CMS recertification no less frequently than every three years. Include in each application for recertification any changes in contracts held since the last certification, as well as a list of State Medicaid contracts and a contact person responsible for each contract. Provide CMS with an evaluation from each Medicaid agency subject to independent confirmation of each evaluation by CMS. As we noted in our previous letter, marketing materials from at least one "PRO-like" entity used the good name of the PROs to establish themselves by stating, "there is very little difference in structure and services" except for the fact that PROs contract with Medicare. In the absence of the requirements discussed above for these entities, such statements are and will remain untrue and misleading to CMS' State partners. Meanwhile, enhanced Federal matching funds will continue to flow to such organizations. Equally troubling, until there are robust requirements for entities wishing to qualify as "PRO-like" entities, CMS has no assurance that qualified organizations are overseeing the quality of care provided to vulnerable low-income Medicaid recipients. Thank you for considering our comments on this issue. If you have any questions or require any additional information, please contact me at 202-261-7568 or Dschulke@ahqa.org. Respectfully, David G. Schulke Executive Vice President cc: Dr. Jeffrey Kang Dr. Stephen Jencks