Ethical Issues Associated with Peer Review in Medicare

Abstract

Delegation of Medicare peer review authority to hospital committees contributed to the failure of Professional Standards Review Organizations. The financial incentives of prospective payment under Diagnosis-Related Groups are associated with partic ularly aggressive hospital-based review and ethical tensions between attending physicians, medical staff committees, and hospital administration. Peer Re view Organizations (PROs) are expected to mediate as well as monitor in this environment, but PROs are harshly judged in turn by the "SuperPRO," which finds them too permissive, and by administrative law judges who overturn the majority of their denials on appeal. Although PRO deliberations are held confi dential, release of denial statistics and hospital-spe cific mortality information raises serious concerns.