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DOCUMENT RESURN
07423 - [C2908005]
Opportunities To reduce Administrative Costs of Professional
Standards xwview Organizations. HND-78-168; 8-164031(3). October
12, 1978. Released October 19, 1978. 23 pp. + 5 appendices (5
pp.).
Report to Rep. San H. Gibbons, Chairman, Bouaa Committee on Ways
and deans: Oversight Subcommittee; by Elmer B. Staats,
Comptrcller general.
Issue Area: Health Programs: fteibrsement Policies and
Uilia dti C% trols (1208).
Contact: Human RPsourcu 4v.
Budget Function: Qt: neral Health Financing Assistance
(555).
Organization Concerned: Department of Health, E4ucation, and
Welfare; Health Care Financing Administration.
Congressional Relevance: House Committee on Ways and Beans:
Oversight Subcommittee. Rep. San ff. Gibbons.
Authority: Social Sectrity Amendments of 1972 (P.L. 92-603).
Social Security Act. =45 C.F.R. 74. S. Rept. 92-1230. S.
Rept. 93-553.
Professional Standards Review Organizations (PSROs)
were established in order to assure that health car* services
provided under medicare and medicaid conform to appropriate
professional standards and are delivered in the most effective,
efficient, and econcmical manner possible. On November 14, 1977,
the Depurtment of Health, Education, and Welfare (HEP) announced
that it was increasiDg the maximum allowable compensation for
PSRO Executive Directors and medical Directors.
Pindings/Concluslons: The salary schedules cetablished for
executive dl-ectors appeared to be inflpted, and criteria and
dat on which they mere based were not consistent with the
backgrounds of most executive directors. The salary increases
are about 8% to 10% higher than they would be if they were based
on rates for similar positions in nonprofit organizations, and
the levels are equal to, or higher than, those in similar
positions in the medicare/sedicaid administration complex. Also,
there are similarities in the adminintrative hierarchy within
each organization and opportunities in States with more than one
PSRO to consolidate similar administrative functions which could
result in cost savings. The 164 PS2Os in the 21 States with more
than one PSRO area wll2. spend over $0 million for
administrative staffs. Consolidation can best be achieved when
nonperforming organizations are identified and removed from the
program. Recommendations: The Secretary of HEW should direct
the Administrator of the Health Care Financing Administration
to: rescind the executive director salary levels published in
November 1977 and establish new levels based on salaries paid
comparable positions in nonprofit orgaripzations; and identify
PSRO areas where administrative staff and functions can be](ViewImageLocal?handle=hein.gao/gaobaaydh0001&div=1&collection=&method=preview&ext=.png&size=3)