The Department of Health, Education, and Welfare's Professional Standards Review Organization Program

The Professional Standards Review Organizations (PSRO) are groups of local practicing physicians who organize and operate peer review mechanisms to assure that health care services provided under three Federal health care programs conform to appropriate standards and are delivered efficiently, effectively, and economically. These programs include Medicare, Medicaid, and Maternal and Child Health. A concurrent review is performed by having a PSRO review coordinator screen all hospital patient admissions and lengths of stay. Cases that do not appear appropriate are referred to a PSRO physician who reviews and makes a determination of the case. The Department of Health, Education, and Welfare (HEW) evaluates the PSRO's through fiscal intermediaries under its post-payment monitoring program. Problems have been found with the HEW evaluations, such as inappropriate inclusion and exclusion of hospitals in the data used. The information available shows that the fiscal intermediaries questioned from 1.1 to 5.5 percent of the days of care that the PSROs had certified as necessary. Moreover, the PSRO's agreed that between .2 and 4.2 percent of the days that they certified as necessary were unnecessary. Several factors which have contributed to inappropriate hospital admissions and lengths of stay include: (1) inadequate monitoring by the PSRO's; (2) reluctance of PSRO personnel to enforce guidelines or challenge a physician's judgment on medical necessity; and (3) since a PSRO review is performed at certain times during a patient's stay, patients may needlessly remain in the hospital from the date that they are ready for discharge until the next date a PSRO review is performed. The effectiveness of the program could be enhanced if better guidance was given to program personnel and if the data collected and reported by the fiscal intermediaries were appropriate to meet program needs.