As part of a broad review of hospital quality oversight, the Office of the Inspector General (OIG) of the Department of Health and Human Services is evaluating the hospital survey activities of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).
Under the OIG initiative, federal observers will accompany JCAHO teams on accreditation surveys at four hospitals in different areas of the country. In addition to scrutinizing how JCAHO responds to reports of adverse patient care events, the observers will review a sample of recent survey reports and other JCAHO documents. OIG plans to make the results of its review available to the public this fall.
The JCAHO hospital accreditation program has drawn heavy fire from critics who say its effectiveness is compromised by JCAHO's close ties to the hospital industry. A highly critical report last year from the consumer advocacy group Public Citizen charged that even when inspections reveal substantial quality problems, JCAHO rarely denies accreditation.
To back up that assertion, Public Citizen presented study results showing that one-third of hospitals surveyed by JCAHO in 1992 were cited for inadequate monitoring of medication services, nearly half were cited for inadequate infection control programs, and about 40% were cited for problems in monitoring of surgical and/or anesthesia procedures-yet almost all (98%) were accredited.
These findings led Public Citizen to conclude that JCAHO "views hospitals not as entities to be regulated but as customers to be served and kept satisfied."
Responding to the Public Citizen report, JCAHO pointed to several program improvements in recent years, including an increase in unannounced surveys and intensified follow-up activities.
This fall, Congress is scheduled to hold hearings to work out a detailed plan for expanded access to federal supply schedule (FSS) drug prices.
The Federal Acquisition Streamlining Act of 1996 calls for the creation of a new purchasing cooperative that will make discounted FSS prices available to some state and local government entities, discounts currently offered only to the Department of Veterans Affairs. The program was initially slated to get under way in October, but Congress has blocked implementation pending the outcome of hearings to resolve key policy issues.
Federal officials are concerned that admitting too many state and local purchasers into the new cooperative may drive up supply schedule prices. As a recent report from the U.S. General Accounting Office cautions, "the larger the [FSS] market, the greater the incentive would be for drug manufacturers to raise FSS prices to limit the impact of giving low prices to more purchasers."
The Pharmaceutical Research and Manufacturers of America (PhRMA) is urging that access to the new cooperative be tightly restricted to minimize any chilling effect on its members' research and development activities.
If access to the new FSS purchasing cooperative is not tightly restricted, PhRMA says, up to 45% of total prescription sales would be subject to FSS price controls.
That projection is grossly exaggerated, according to the Public Hospital Pharmacy Coalition (PHPC), which represents state and local government organizations eager to gain access to FSS prices, especially for expensive AIDS medications.
PHPC says the impact of FSS program expansion on the overall drug market can be minimized by limiting participation to government entities that purchase drugs strictly for their own use and dispense drugs in their own facilities. Under such an arrangement, PHPC estimates, FSS purchases would comprise no more than 4.5% of total sales. The actual FSS market might be much smaller, PHPC says, because procurement rules would bar many state and local purchasers from participating in the cooperative, and others eligible to participate would continue to negotiate directly with manufacturers for below-FFS discounts on some products.
Under a major new initiative to update and standardize Medicare payment systems, the Health Care Financing Administration (HCFA) has awarded contracts totaling more than $44 million for development of nationwide systems to streamline two problem-plagued areas of Medicare claims processing.
Maryland-based VIPS, Inc. will work with HCFA to develop a standardized system for processing durable medical equipment (DME) claims. Texas-based Electronic Data Systems, Inc. will set up a similar system to process claims for physician and clinical laboratory services and other outpatient services.
The new payment systems will be phased in over two years.