HEW Progress and Problems in Establishing Professional Standards Review Organizations

HRD-78-92: Published: Sep 12, 1978. Publicly Released: Sep 12, 1978.

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The Professional Standards Review Organization (PSRO) program was initiated to have local physicians establish peer groups to determine whether services to patients under the Medicare, Medicaid, and maternal and child health programs are medically necessary, provided in accordance with medical standards, and provided in an appropriate setting. Legislation provides for designating PSRO geographic areas, establishing PSRO's and advisory councils, enrolling physicians, and implementing medical review systems.

The Department of Health, Education, and Welfare (HEW) has designated 203 geographic areas, but 5 years after passage of the legislation, only 62 planning and 108 conditional PSRO's had been established. Since June 1977, many PSRO's have been added, but most will remain conditional until after October 1978. Organizational difficulties have hampered implementation of the PSRO program, but consolidation of the Medicare, Medicaid, and PSRO programs under the new Health Care Financing Administration (HCFA) should facilitate coordination and policymaking. The program has also been hindered by: less than anticipated funding and staff limitations, lack of timely regulation issuance and inadequate guidance, lack of aggressive contract administration, and the reluctance of physicians to enroll in the program.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: The Secretary of HEW should require the Administrator of HCFA to: issue instructions to hospitals and fiscal intermediaries on the statutory obligation of participating hospitals to cooperate with PSRO's; issue final program regulations as quickly as possible; see that prompt corrective actions are taken to resolve known problems delaying program implementation; coordinate with the Director, Bureau of Community Health Services, to provide adequate guidance for review of maternal and child health patient care; and promptly designate physician-alternate organizations as PSRO's in areas where a sponsored organization refuses to establish a PSRO. Congress, when establishing new national programs, should consider using the demonstration concept before authorizing full program implementation.


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