GAO Reviews of the Professional Standards Review Program

Two reviews of the Professional Standards Review Organizations (PSRO) program dealt with: (1) the validity of claims made by PSRO about cost savings and causes for medicare utilization changes observed in the study by the Office of Planning Evaluation and Legislation; and (2) staffing levels, salaries, and policies for members of selected PSRO's. When GAO recomputed savings reported in seven PSRO's studies, there were wide discrepancies in the estimates. Several deficiencies were noted with respect to data used by PSRO in their estimates, particularly the use of incomplete data. Also, methodologies used in developing estimates were questionable. Factors influencing medicare utilization changes were changes in medical services, medical practices, number and availability of physicians, and the impact of nursing home bed availability. PSRO review was also cited as a factor influencing medicare utilization. Savings in personnel costs could be realized by establishment of salary ranges for executive directors and medical directors which are comparable to those in the Medicare-Medicaid and health planning administration complex. There are also opportunities to consolidate similar administrative functions and to reduce administrative costs.