JCAHO says it doesn’t fear inquiry; confident work is beyond reproach
An influential congressman is calling for a broad investigation of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), alleging that the accrediting body is ineffective, torn by conflicts of interest, and rife with financial improprieties. The best solution, he says, would be to make JCAHO a federal contractor answering to the government, not to its member hospitals.
The agency responds by saying it welcomes an investigation even though the congressman is wildly misinformed. Rep. Pete Stark (D-CA) is no stranger to JCAHO, having criticized the organization in the past. He tells Hospital Peer Review that he wants the Health and Human Services Office of the Inspector General (OIG) to investigate what he calls fundamental flaws in the way JCAHO oversees health care quality. While there is some doubt as to how quickly the OIG will act on his request, if at all, the congressman’s request is noteworthy because of his stature.
Stark has served in Congress since 1973 and is a senior member of the powerful Committee on Ways and Means. He was chairman of its Health Subcommittee between 1985 and 1994 and currently is ranking minority member on that subcommittee. Stark was a successful businessman and banker before being elected to Congress in 1972.
If the congressman gets his way, or if even a few of his suggestions are taken seriously, health care providers could face a much tougher accreditation process. Stark tells HPR that his latest call for an investigation is his way of keeping JCAHO on its toes.
"I’ve been fighting with them for 15 or 20 years," he says. "They get sloppy, and you threaten to no longer make them the certifying agent, so they get a little tougher. They’ve got such a sweetheart deal."
Stark says he has never liked the whole concept of JCAHO as an accrediting body that must please its customers, accredited health care providers, while also inspecting them and holding them accountable for deficiencies.
"The incentives are wrong. They work for the hospitals; they don’t work for the government," he says. "That’s not to say that they couldn’t do the right job, but the focus of their attention is to keep their members happy."
Stark called for the OIG investigation in a recent letter to Inspector General Janet Rehnquist in Washington, DC. In his letter, Stark noted that Rehnquist has pledged to focus on hospital quality oversight this year. She recently stated that she will revisit areas of concern highlighted in the 1999 OIG report, The External Review of Hospital Quality, A Call for Greater Accountability, which included an investigation of the Joint Commission.
Stark explains in his letter that he has additional concerns not addressed in the 1999 report, "that take on added significance given Medicare’s extensive reliance on [JCAHO] to assure quality of care and patient safety in our hospitals. I request that you address these issues during your upcoming review of the hospital quality oversight issue."
Stark is particularly critical of the agency’s new survey process called Shared Visions — New Pathways, which will go into effect in 2004 and require hospitals and other providers to conduct their own self-assessments before surveyors show up. In his letter, Stark says, "This protocol appears even more collegial and less regulatory in nature than the current survey." The congressman says the quest for improved health care quality would be better served by a system in which the accrediting body took a stronger approach to surveys and then let the chips fall where they may.
"I’ve been in a hospital recently and saw stickers on doors saying, JCAHO is coming next week, so get your records in order,’" he says. "I used to be a banker, and the bank examiner didn’t let us know what day they’d be sitting outside our door. They just showed up; and either we were in compliance, or we weren’t."
Stark’s letter notes that in the most recent Center for Medicare & Medicaid Services (CMS) Report to Congress, validation studies indicated that, "JCAHO was least reliable in assessing Medicare Conditions of Participation [CoPs] when self-assessment activities were a primary component of the monitoring process. Now, it will be the predominant component of the entire survey! I am requesting that you investigate whether the proposed new procedure can effectively assess compliance with the Medicare CoPs and assure quality and safety in Medicare participating hospitals."
Stark also goes after the Joint Commission’s business practices, saying they appear "fraught with potential for conflict of interest." His concerns in this area focus on JCAHO’s subsidiary Joint Commission Resources (JCR), which Stark says "has been aggressively pursuing and obtaining consulting contracts with the very institutions that they are surveying. According to the most recent financial information available, this consulting entity had a $5 million excess on $16 million of revenue — an exceedingly good profit margin’ for a not-for-profit entity." While noting that the agency has attempted to establish a "firewall" between its surveying and consulting entities, Stark points out that half the JCR board members also are members of the Joint Commission board of directors.
"It is difficult for me to understand how this consulting business cannot have a negative influence on the surveying activities," he says. "I hope we don’t have to see the equivalent of the cataclysmic events that occurred in the financial arena with Arthur Anderson, Enron, Global Crossing, and others to realize the problems of mixing regulatory and consulting functions."
Stark says he also is troubled by recent JCAHO financial reports that show more than $750,000 in contributions from unidentified sources. Without knowing the identity of these sources, he says, there is a specter of undue influence eroding the impartiality of the surveying process. "I am requesting that you investigate these business practices, determine whether there is a conflict of interest between competing functions that interferes with JCAHO effectively fulfilling its quality oversight duties, and make any necessary recommendations for change," Stark’s letter says.
Many of the problems, Stark alleges, could be solved by making the government responsible for overseeing health care quality and making the Joint Commission a federal contractor, he says.
In its official response to Stark’s letter, the Joint Commission says it "welcomes an evaluation by the [OIG] at any time. The Joint Commission cooperated fully with an OIG evaluation in 1999. That report found significant value in the accreditation process, and noted that JCAHO standards . . . promote the delivery of quality health care and are widely considered to be state-of-the-art.’ The report also identified opportunities for improvement, most of which had been fully implemented prior to the issuance of the OIG’s final report."
Margaret VanAmringe, vice president for external relations with the Joint Commission, tells HPR that Stark is "woefully ill-informed," his staff never asked for a briefing on Shared Visions — New Pathways, and the congressman appears to be under the misconception that the Joint Commission will start relying entirely on self-assessments in 2004. That is not the case.
The new accreditation process includes provision for a self-assessment by the organization at the approximate midpoint of the accreditation cycle, the JCAHO letter notes. "The self-assessment is an additional accreditation requirement and does not in any fashion substitute for the on-site evaluation by the survey team; neither the survey length nor the size of the survey team are to be reduced." The agency goes on to note that self-assessment methods have long been used successfully by other accrediting bodies and evaluators, including government agencies.
VanAmringe says Stark’s charges about conflict of interest also are off-base. "We have never let the fact that we might lose a hospital’s business be a determinant factor in how we score a hospital. We’re not in the business of giving scores to please people." Stark missed the point of the new survey process, she says. The self-assessment allows the surveyor to be more informed of the hospital’s history and permits the surveyor’s time on site to be better utilized for a rigorous, more pertinent survey. "This is in no way diluting the survey process," she says.
As for Stark’s concerns about discrepancies between JCAHO surveys and CMS validation survey findings, the Joint Commission’s response says those are regularly described in the CMS annual report to Congress. While some critics of the Joint Commission have pointed to these discrepancies as a cause for concern over the agency’s oversight, the Joint Commission notes that the number of such discrepancies has varied significantly from year to year, and these discrepancies tend to relate primarily to the physical environment in which care is provided.
"An important confounding factor in assessing the significance of these discrepancies is the number of substantive differences in the versions of the Life Safety Code applied in the respective surveys," the response says. "This problem should now be resolved on a going-forward basis with CMS’ recent adoption of the current version of the Life Safety Code. Joint Commission and CMS requirements in this area are now identical."
Regarding JCR, the Joint Commission’s response asserts that "JCR operates in a completely separate fashion from JCAHO in accordance with strict guidelines that were first adopted in 1986 and have been updated periodically since then. The firewall’ created by these guidelines meets current U.S. Securities and Exchange Commission separation criteria. No organization-specific information of any kind is shared between the entities."
However, the Joint Commission concedes that, "Mr. Stark raises an interesting question about the board structures of the two entities. That question is already the subject of review and discussion by the leaders of the two boards."
The Joint Commission’s response says Stark’s statements with respect to JCR’s services "are at best misleading. In 2001, the subsidiary provided consulting services to fewer than 2% of all Joint Commission-accredited organizations. For this period, 88% of JCR’s net revenues after expenses was generated by education programs, publications, and international activities. In fact, the net revenues generated by domestic consulting amounted to substantially less than $1 million."
As for profits and funds from unknown donors, the Joint Commission emphasizes that the Joint Commission is a 501(c)3 charitable, not-for-profit organization. "As such, it accepts donations in the form of unrestricted grants to subsidize JCR educational programs and publications offered to health care organizations to help them improve the safety and quality of care that they provide. At the same time, strict corporate guidelines prohibit JCAHO and JCR from accepting any contributions from accredited or accreditation-eligible organizations or their corporate owners."
The HHS OIG’s office has not responded yet to Stark’s request. VanAmringe says she doesn’t expect the OIG to launch a full-scale investigation as it did in 1998, but that the Joint Commission is ready if it does.
"In 1998, we opened our books, and I think in general they were very satisfied with what they found," she says. "We obviously have nothing to hide."
[For more information, contact:
- Joint Commission on Accreditation of Healthcare Organizations, One Renaissance Blvd., Oakbrook Terrace, IL 60181. Telephone: (630) 792-5000.
- Rep. Pete Stark, 239 Cannon HOB, Washington, DC 20515. Telephone: (202) 225-5065.]
An influential congressman is calling for a broad investigation of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), alleging that the accrediting body is ineffective, torn by conflicts of interest, and rife with financial improprieties.
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