Legislation Would Expand Role and Number of QIOs

CMS will be changing its relationship with Quality Improvement Organizations (QIOs) under a new law passed by Congress on October 12 and which President Obama is likely to sign.

The main purpose of the legislation – the “Trade Adjustment Assistance Extension Act” – is to amend the Trade Act of 1974 to extend duty-free treatment under the Generalized System of Preferences (GSP) through July 31, 2013. Sec. 261 of the legislation, however, is designed to improve contracts with QIOs in an effort to improve the quality of care provided to Medicare beneficiaries.

QIOS, usually non-profit organizations staffed by doctors trained in medical review, ensure that services provided to Medicare beneficiaries are medically necessary, reasonable, effective, and economical, and that services meet professionally accepted standards of quality. Every QIO must either  be sponsored by a significant number of physicians actively practicing in the QIO area, or must have available to it the services of a sufficient number of area physicians to assure adequate peer review. An organization competing for a QIO contract must demonstrate that it qualifies as either a physician-access or a physician-sponsored organization.

An analysis of the legislation from the Congressional Budget Office notes that QIOs review medical care, help beneficiaries with complaints about the quality of care, and implement care improvements. The legislation would make several changes to the composition and operation of QIOs, and would harmonize QIO contracts with requirements of the Federal Acquisition Regulation. 

One change would expand the geographic scope of QIO contracts, allowing them to be established at a local, state, regional, national or other geographic level. Currently, CMS has contracted with just one QIO in each state or territory. The legislation also would increase the contract period between CMS and a QIO from three to five years. QIOs also will have the responsibility to review all (or at least a sample of all) ambulatory surgical procedures performed in the QIO’s geographical area. 

The CBO estimates that these changes would reduce spending by $330 million over a 10-year period.