John Carroll

Should the National Committee for Quality Assurance take over part of the job of overseeing health plans? It seems to be working in some states.

John Carroll

For years, the National Committee for Quality Assurance has been steadily pressing the frontiers of its accreditation work, picking up the official duties of state regulators and Medicaid agencies by substituting the results from their annual survey audits of health plans for the state version. By last count, 31 states had agreed to let the quality overseers at NCQA do all or part of the state's MCO surveys used to check on their compliance with state laws.

The reasoning behind NCQA's success is simple: In many cases, both the NCQA and the state agencies were seeking the same information, including the way health plans managed access to care, quality improvements, and the rights and responsibilities of members. By using the NCQA's service, the state could lose a layer of bureaucracy and health plans were freed from duplicating their work in gaining accreditation. That was a particular advantage to the MCOs that were already picking up the costs of meeting the NCQA's standards.

There was taxpayer money to be saved as well: NCQA charged the states nothing, relying on fees from health plans and other sources to cover the bills.

The process of transferring survey audits from state regulators to the NCQA is often called "deeming," where health plans that pass a section or all of the NCQA survey are deemed to be compliant with state regulations.

"Some states have chosen just to extend deeming to one area, but in other states, the deeming is extended across the board," says Richard Sorian, NCQA's vice president for public policy.

But when California's Department of Managed Health Care — which regulates the managed care organizations in the state — cautiously began to test the idea of becoming the 32nd state to join forces with the NCQA, a group of homegrown critics pounced.

Health Access, a patients' rights group, attacked the idea as something akin to letting the fox in to guard the hens. NCQA, it said, was too closely aligned with the managed care industry to be trusted to help regulators determine whether health plans were keeping up with their responsibilities to members. But it was the opposition of the state's influential physician group, the California Medical Association, that figured most prominently in the debate.

In testimony at a public hearing June 8 in Sacramento, the CMA conceded that no one should be required to do duplicative work for the agency, but added that the NCQA tie-in wasn't that simple.

Not enough data?

To begin with, said the CMA, the DMHC immediately raised a red flag by refusing to give it a copy of the comparison that was made by the agency's "deeming steering committee." California's DMHC, which prided itself as being one of the most effective state regulatory bodies in the nation, could hardly just hand over such a big piece of the regulatory work by saying that the two groups' work was so similar. Add to that a state law that mandates some of the strictest regulatory oversight in the country, said the CMA, and you have good reason to reject the NCQA option.

The CMA said that California law "contains the most stringent and robust patient/provider protections in the nation.... Given the strength of California law and the mission of the Department, CMA is extremely concerned about the possibility of allowing any private entity with less stringent standards to serve as a substitute for regulatory oversight."

In fact, the doctors group asserted, only about 67 percent of the DMHC's survey audits are in line with the NCQA, and even that figure could be optimistic. Audit areas considered "highly consistent" didn't appear so consistent to the CMA on close inspection — including one section on quality management and improvement and another on practitioner availability.

Recent changes in California law have created an even wider divergence of approaches, and recent decisions by the DMHC finding health plans deficient in key areas would probably have gone unnoticed by the NCQA accreditation process, according to the CMA.

Bottom line: "Under all of these circumstances, health plans in California would be subject to less stringent regulation and oversight of quality of care." And the high standards of California, CMA adds, would be replaced by the "lowest common denominator" of a national accreditation group.

For his part, the NCQA's Sorian says that the critics are either wrong or just lack the facts.

As for the charge that the NCQA is not sufficiently independent, says Sorian, "It's absolutely not the case. We're an independent, nonprofit organization under section 501(c)(3) of the Internal Revenue Code " with only one of 16 board members employed by a health plan. Nobody at NCQA is looking to gut or even weaken the state's managed care review process.

"We believe in being tough," says Sorian, "but not when it's just a matter of duplication."

As for the CMA's objections: "As the knowledge level of what NCQA does and how it does it have become much clearer, that comfort level will increase," says Sorian. "Clarity will help them; I wouldn't expect them to be opposed."

Equally tough

Sorian emphasizes that the NCQA is ready and willing to sit down and discuss the situation with all the managed care players in California, and nobody is being dismissed out of hand. The NCQA has also felt that it has bent over backward to see where the state review and its own reviews match or don't match.

The NCQA sat down with the DMHC to do a line-by-line comparison of their surveys, says Sorian. In the end, he says, they agreed that about 75 percent of the survey was a duplicate of the state's. In a few cases, the state was tougher than the NCQA and in a few cases NCQA had tougher standards.

But Sorian is quick to add that the NCQA has already signaled its readiness to work with the state agency, changing its process in California so that future surveys in that state would use the state's tougher standards. The only important question for the department to answer is whether it wants to apply the NCQA's tougher standards that remain in the balance.

The delegated process could be rolled out for the 10 biggest health plans in the state, with 83 percent of all covered lives. Smaller health plans without sufficient numbers of members to be accredited by NCQA could still be directly reviewed by the agency.


There are definite advantages to having states switch to NCQA reviews, says Sorian. Health plans would see an added benefit in gaining NCQA accreditation and a bigger return on the fees that they pay the organization, in the form of a reduction of costs for state review.

Other states haven't had the same struggle as California, sometimes replacing the entire state review process with the private survey. For example, plans have to be accredited by the NCQA to operate in Maine.

In Tennessee, says Sorian, the Medicaid program, TennCare, has made NCQA accreditation a condition of doing business with the state. In other cases, states may decide to use just one category of the NCQA review, such as meeting state requirements on providing an effective appeal process for people who have been rejected for coverage.

As of now, California is still considering what, if anything, it will do.

"We just wanted to get some input to see if we wanted to develop a proposal," says DMHC spokesperson Lynn Randolph. The agency expects to hold a follow-up meeting with Health Access and others, but there's no schedule for deciding on whether the state will seek a deal with NCQA or not.

John Carroll, a freelance writer living near Austin, Texas, has been a Managed Care contributing editor for four years.

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