HCFA issues request for proposal to contract with PROs for utilization and quality control, emphasizing detection of inappropriate utilization and payments under the new PPS system. On July 1, 1984, after implementation of federal legislation, MSFMC became the Peer Review Organization for Tennessee. Contract goals included reducing unnecessary admissions, ensuring that payment rates matched the diagnostic and procedural information contained in the patient records and reviewing patients transferred or readmitted within 7 days of discharge to determine whether readmission was for the same condition as the first hospital visit. Additonally, the PRO contract included at least five objectives: reducing unnecessary readmissions because of substandard care during the prior admission, ensuring the provision of medical services critical to avoidance of unnecessary patient complications, reducing unnecessary surgery or other invasive procedures, reducing the risk of mortality and reducing avoidable postoperative or other complications. The PROs were also expected to develop and analyze Medicare patient data to identify instances and patterns of poor quality.
