Quality Standards, Accreditation, and Performance Measures

17 Quality Standards, Accreditation, and

Performance Measures
Objectives
After completing this module, you will be able to:
define quality standard,
define accreditation,
identify two major accrediting organizations for health plans,
define performance measure, and
list a few of the ways the Affordable Care Act addresses healthcare quality.
In the last module we described the methods health plans use to measure and improve
the quality of administrative and healthcare services delivered to plan members. In this
module we describe how quality standards, accreditation, and performance measures
help health plans demonstrate the quality of their programs and services to plan
members, purchasers, providers, and other external customers.

Quality Standards
Health plans typically rely on standards to assess the quality of the services they
provide. Standards are defined by the Institute of Medicine as authoritative statements
of minimum levels of acceptable performance or results, excellent levels of performance
or results, or the range of acceptable performance or results. Standards represent the
expectations of the health plan, members, purchasers, and outside agencies for
resource utilization, healthcare and administrative processes and procedures, and
outcomes. Standards also provide a means of holding health plans, their network
providers, and their staffs accountable for providing quality services.
To qualify as a valid measure of quality and performance, a standard must
relate to conditions that are important to the plan and its enrollees and providers;
focus on structures, processes, and/or outcomes that can be influenced through
quality improvement initiatives; and
address situations that are controllable by the organization.
Health plans may use internal or external standards to measure and evaluate the quality
of their services.
Internal standards are developed by the health plan itself and are based on the
organizations historic performance levels. Health plans generally use internal

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standards to measure the quality of administrative services, such as customer

service, claims processing, etc.
External standards are based on outside information, such as published
industry-wide averages or benchmarks (sometimes referred to as best practices).
Health plans usually use external standards to evaluate healthcare services,
such as the rates of childhood immunization or breast cancer screening exams
provided to enrollees. Many external standards are developed by accreditation
organizations and are used in the accreditation process.

Accreditation
Accreditation is an evaluative process in which a healthcare organization undergoes an
examination of its operations and processes to determine if they meet designated criteria
as defined by the accreditation organization and to ensure that they meet a specified
level of quality.1 The accreditation organization (also called the accrediting body)
measures plan compliance with standards by means of document review, onsite visits
and interviews, medical record review, and the evaluation of member services systems.
Several organizations provide accreditation for health plans and providers. While there is
some overlap, each organization has its own standards. As a result, external customers
sometimes have difficulty determining which accrediting body is the most appropriate in
a particular case. In this section we will look at two major accreditation organizations for
health plans, NCQA and URAC.
NCQA
NCQA (the National Committee for Quality Assurance) is a nonprofit organization
that accredits health plans, including PPOs, HMOs, POS plans, and others, as well as
managed behavioral health organizations (MBHOs), credentials verification
organizations (CVOs), disease management (DM) organizations, and physician
organizations. More than two-thirds of all health plan members in the U.S. are covered
by an NCQA-accredited plan.2
The Accreditation Process
NCQAs accreditation process consists of two parts: an onsite survey of administrative
and healthcare services and an offsite evaluation of audited results of selected
measures of effectiveness of care and consumer satisfaction included in NCQAs
Healthcare Effectiveness Data and Information Set (HEDIS). NCQA uses the CAHPS
4.0H survey, which is a combination of the original HEDIS member satisfaction survey
and the CAHPS survey developed by the Agency for Healthcare Research and Quality
(AHRQ) to measure consumer satisfaction. The core CAHPS survey questions are
administered separately to commercial, Medicare, and Medicaid populations. Onsite
evaluations are conducted at least every three years. HEDIS results are evaluated
annually.

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Quality Standards
During the onsite visit evaluators interview health plan staff and review materials to
measure the organizations practices against standards in the following areas related to
quality management and improvement and patient care:
program structure
program operations
health services contracting
availability of practitioners
accessibility of services
member satisfaction
complex case management
disease management
clinical practice guidelines
continuity and coordination of medical care
continuity and coordination between medical and behavioral healthcare
standards for medical record documentation
delegation of quality improvement
In accrediting a health plan, NCQA also reviews processes for utilization management
(such as the review and authorization of medical care); credentialing and recredentialing
of providers; members rights and responsibilities; and member connections (such as
innovations in member service, pharmacy benefit, and interactive consumer health
tools). In addition, NCQA accreditation standards address consumer protection issues
related to internal and external processes for reviewing and evaluating medical appeals.
Accreditation standards are updated regularly.
The Accreditation Decision
Results of the onsite visit and the HEDIS evaluation are combined and organized into
five categories: access and service, qualified providers, staying healthy, getting better,
and living with illness. Scores in each of these categories are calculated and used to
arrive at an accreditation decision. Health plans can earn one of five accreditation levels:
excellent (highest), commendable, accredited, provisional, and denied. The accreditation
scores for health plans may total up to 100 points. A maximum of 54.14 points may be
awarded based on a health plan's accreditation standards compliance and the remaining
45.86 points are based on the plan's HEDIS and CAHPS results.
URAC
URAC is a nonprofit organization that grants accreditation to health plans and health
networks. URAC accredits entire organizations based on core standards, and it also has
accreditation programs that focus on a single functional area within an organization,
including case management, claims processing, comprehensive wellness, consumer

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education and support, credentialing, disease management, drug therapy management,

health website, HIPAA compliance, utilization management, and others.
The Accreditation Process
URAC has separate accreditation programs for health plans and health networks, but for
both the process consists of a desktop review of plan policies and procedures and an
onsite visit to verify the accuracy of the documentation and the plans compliance with
accreditation standards.
Quality Standards
The quality standards used for both plans and networks are fundamentally the same and
address three general areas: quality improvement and management structure,
organization, and staffing; the nature and scope of the quality management program;
and systems for addressing complaints, corrective action, and disciplinary action. In
some cases standards apply only to health plans; in other cases the standards are the
same for both plans and networks, but the scope is different. For example, credentialing
requirements are different for plans than for networks.
URAC standards consist of components called elements. A primary element is one that
has a direct and significant impact on the welfare and safety of consumers and patients.
A secondary element is one that does not have such an impact but is a desirable
feature of a high-quality program. URAC does not currently include performance data as
part of the overall accreditation process for health plans or health networks, but it is
developing such measures for some functional areas. Quality management standards
require health plans and networks to engage in quality improvement projects, and URAC
allows HEDIS measures to satisfy some of these requirements.

Performance Measures
In response to the demand for ways of assessing outcomes, accrediting bodies,
government agencies, and commercial organizations have developed performance
measures. A performance measure is a quantitative measure of the quality of care
provided by a health plan or provider that consumers, payors, regulators, and others can
use to compare the plan or provider to other plans or providers.
HEDIS
The Healthcare Effectiveness Data and Information Set (HEDIS), administered by
NCQA, is a performance measurement tool designed to help healthcare purchasers and
consumers compare the quality offered by different health plans. Specified HEDIS
measures of effectiveness of care are used as part of NCQAs accreditation program for
health plans. HEDIS 2010 divides performance measures into seven domains:
Effectiveness of carewhether plan members receive specific health services
during stated time periods and whether the plan meets the needs of sick
members and helps well members avoid sickness.
Access/availability of carewhether members obtain services in a timely
manner without undue burdens or inconvenience.

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Satisfaction with the experience of carewhat current members think about

the plan and the care provided (includes CAHPS measures).
Use of serviceswhat services a member receives and the utilization of those
services.
Cost of carerelative resource-use measures for select high-cost, high-volume
conditions.
Health plan descriptive informationenrollment data, board certification of
network providers, and the race/ethnicity and language diversity of members.
Health plan stabilitythe plans total membership.
HEDIS is updated annually to enhance the quality of its evaluations and satisfy
consumer demands. For example, HEDIS 2010 added measures for immunizations for
adolescents and updated measures for cervical cancer screening and well-child visits.

Additional Sources of Quality Standards, Performance Measures, and

Data
Information that can be used to improve the quality of healthcare and enhance
consumers ability to make informed healthcare decisions is also available from
commercial sources, government agencies, and professional societies.
NCQA
NCQA offers benchmarking information in Quality Compass, a national database of
performance and accreditation information submitted by health plans. Performance
measures for Quality Compass are drawn from HEDIS and CAHPS. Participation by
health plans is voluntary, but many public and private purchasers now require HEDIS
reporting, so many plans find it necessary to participate in order to compete effectively
for customers.
Agency for Healthcare Research and Quality (AHRQ)
The Agency for Healthcare Research and Quality (AHRQ) (formerly the Agency for
Healthcare Policy and Research) is the primary research arm of the federal Department
of Health and Human Services (HHS). In addition to the CAHPS surveys discussed
above, AHRQ has initiated a series of projects to develop quality measures and
improvement strategies for medical care. For example, the National Quality Measure
Clearinghouse (NQMC) is a database and website for information on specific evidencebased healthcare quality measures and measure sets. NQMC builds on AHRQs
previous initiatives in quality measurement, including the Computerized Needs-Oriented
Quality Measurement Evaluation System (CONQUEST), the Expansion of Quality of
Care Measures (Q-SPAN) project, the Quality Measurement Network (QMNet) project,
and the Performance Measures Inventory (PMI).
Quality Assessment Performance Improvement (QAPI)

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The Centers for Medicare and Medicaid Services (CMS) of HHS established the Quality
Assessment Performance Improvement (QAPI) program to monitor the quality
improvement efforts of Medicare Advantage plans (see below) and health plans
providing Medicaid coverage. QAPI establishes specific quality assessment and
improvement standards that health plans must meet to remain eligible as Medicare
contractors. These standards are voluntary for Medicaid programs.

The Affordable Care Act and Quality

The Affordable Care Act (healthcare reform) promotes healthcare quality improvement in
a number of ways. It creates a variety of demonstration projects addressing provider
compensation, information collection and analysis, and financial disclosure. It funds
research on the comparative effectiveness of various medical treatments. It includes
medical malpractice initiatives and makes changes to the Medicare and Medicaid
programs intended to improve quality.
ACA also calls for the development of a national quality improvement strategy to include
ways to improve the delivery of healthcare services and patient health outcomes. This
initiative involves the creation of processes for the development of quality measures with
input from a wide variety of stakeholders, and these quality measures are expected to be
used in health plan program reporting and for payment purposes. This National Quality
Strategy is due to Congress by January 1, 2011.
ACA and Medicare Advantage
The most significant changes made by ACA in the area of quality pertain to Medicare
Advantage. Medicare Advantage (MA) plans are Medicare-approved private-sector
health plans that provide Medicare coverage and some other benefits. Medicare
beneficiaries have the option of enrolling in an MA plan instead of traditional Medicare,
and many do (currently 24 percent3). (MA plans are described in more detail in a later
module.)
MA plans are paid by the federal government for providing coverage to Medicare
beneficiaries. ACA will generally reduce payments to MA plans, but it also gives MA
plans the opportunity to obtain higher payments by meeting certain quality criteria.
MA plans are ranked in a star system: five stars (excellent), four stars (very good), three
stars (good), two stars (fair), and one star (poor). Medicare beneficiaries usually have
more than one MA plan available to them, and these rankings are designed to help them
choose. The rankings are based on HEDIS and CAHPS data and on 33 performance
measures in the following areas:
preventive care (screenings, tests, and vaccines);
management of chronic conditions;
responsiveness and customer care;
telephone customer service; and
member satisfaction (complaints, appeals, members leaving the plan);

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Under ACA the star rankings will affect the amount an MA plan receives from the
government in two ways:
Rebates. Each MA plan submits a bid to Medicare, offering to provide Medicare
coverage for a certain amount per member. Medicare will not pay more than a
benchmark amount, which is a percentage of what it costs the government to
provide Medicare coverage itself. (Benchmark percentages vary by county based
on healthcare costs.) If a plans bid is lower than the benchmark, it is allowed to
keep a percentage of the difference (a rebate). The plan can use this rebate to
provide supplemental benefits to members, lower premiums, or reduce costsharing, making the plan more attractive to potential members. The rebate
percentage a plan receives will depend on its ranking: plans with one to three
stars will receive 50 percent, those with three-and-a-half or four stars will get 65
percent, and those with four-and-a-half or five will get 70 percent.
Example: The MA benchmark in a certain county is 105 percent of Medicare costs,
and MA Plan A submits a bid based on 95 percent. Plan A has three stars, so it can
keep a rebate of 50 percent of the 10 percent difference between its bid and the
benchmark, or 5 percent of costs. Plan B also submits a bid of 95 percent, but it has
five stars so its rebate is 7 percent (70 percent of the 10 percent difference).
Bonuses. MA plans that earn four or more stars will receive bonus payments, to
be phased in from 2012 to 2014: 1.5 percent in 2012, 3 percent in 2013, and 5
percent in 2014 and after. Plans in certain counties can receive double bonuses.
As mentioned, ACA will reduce government payments to MA plansspecifically,
benchmark percentages, the maximum Medicare will pay and the basis for rebates, will
be gradually lowered. Quality-based payments will present an opportunity for MA plans
to make up this loss, but to earn them most MA plans will have to improve quality
significantly, as the average plan today has 3.27 stars, and only about a quarter of MA
enrollees are in a four or five star plan.
Notes
1

American Association of Health Plans. March 2000. Guide to Accreditation 19992000, p. 83.

NCQA. www.ncqa.org.

The Henry J. Kaiser Family Foundation, Medicare Advantage 2010 Data Spotlight, Plan
Enrollment Patterns and Trends, June 2010.
3

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