GAO Reviews of the Professional Standards Review Program

Two reviews of the Professional Standards Review Organization (PSRO) program were conducted. One review involved examination on a sample basis of cost-saving claims made by individual PSRO and determination of the cause for any significant increases or decreases in Medicare utilization, while the second review involved examination of the staffing levels, staff salaries and fringe benefits, and travel policies for staff members of selected PSRO. Reviews of seven estimates of PSRO cost savings indicated significant deficiencies with respect to the adequacy of the data used in the estimates and computation errors as well as a variety of problems with the methodologies used in developing the estimated savings. Determination of the factors influencing Medicare utilization changes indicated problems with the adequacy of the data utilized in the study. Medicare utilization changes could be attributable to a variety of influencing factors such as changes in medical services, medical practices, and availability of physicians or nursing home beds, as well as PSRO reviews. Two areas for potential savings in the program include the establishment of the PSRO Executive Director salary ranges at levels higher than appropriate and consolidation of PSRO administrative functions including technical personnel to support the PSRO data systems.