Several major, national forces have created the mandate of the Peer Review Organizations (PROS) for the evaluation of the quality of care received by Medicare patients. The shift of the Medicare Program to prospective payment to hospitals has caused con cern that this change in financial incentives may have adverse effects on quality. An analysis and review of the experience of the California PRO (California Medical Review, Inc.)-including the application of sanctions—suggests that corrective actions have been successful in addressing quality deficiencies. However, the relationship between those deficiencies and the prospective payment mechanism remains un clear.
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