Grassley Requests More Information From N.J. Group About Medicare QIOs

Senate Finance Committee Chair Chuck Grassley (R-Iowa) on Thursday sent a letter to the CEO of a New Jersey Medicare Quality Improvement Organization requesting additional information about its compensation and spending practices as part of an ongoing investigation into the company's operations, the Washington Post reports (Gaul, Washington Post, 12/10). The letter, dated Dec. 8, was sent to Martin Margolies, CEO of the QIO formerly known as the Peer Review Organization of New Jersey, which is now called Healthcare Quality Strategies.

According to the letter, a July 26 article in the Washington Post raised questions about the financing practices of QIOs and the level of investigations they perform. In response, the letter states, Grassley in August sent a letter to CMS requesting information from more than 15 QIOs, including PRONJ, on travel expenses, compensation of board members and contracts (Carey, CQ HealthBeat, 12/9).

According to the Post, Finance Committee staff since have made more detailed data requests and have asked the HHS Office of Inspector General and the Government Accountability Office to aid in the investigations (Washington Post, 12/10).

In Thursday's letter, Grassley notes that PRONJ responded to his original request for information but said additional information is needed "to clarify a number of issues" related to the Finance Committee's review of PRONJ's documents. The letter asks why the number of complaints PRONJ has received "appears drastically low" compared with the number of beneficiaries in New Jersey.

The letter also asks for more information about a finding by the HHS OIG that PRONJ has the fifth-highest improper payment amount among QIOs for long-term acute care (CQ HealthBeat, 12/9). The letter questions why PRONJ spent $100,000 in 2003 and 2004 on retreats for its directors to the Cayman Islands and California (Washington Post, 12/10).

In addition, Grassley questions the payment of salaries totaling $526,976 to PRONJ's 21 board members in fiscal year 2003. "This seems like an alarming sum considering the majority of national not-for-profit corporations do not pay their board members," the letter says (CQ HealthBeat, 12/9).

The letter asks for a list of board members who attended the retreats, detailed information on how the company determines compensation, the total compensation for board members from 2000 to 2005 and the source of the funds (Washington Post, 12/10). In addition, Grassley raises concerns about the makeup of PRONJ's board and the process by which beneficiaries can file a complaint. He requests a response by December 29 (CQ HealthBeat, 12/9).

Cari Miller, a spokesperson for PRONJ, said the retreats were not paid for with CMS funds and that only the company's 12-member executive committee attended the retreats. She said that the compensation figures could be overstated by as much as half because of an accounting error. In addition, Miller said that a consultant determines compensation for board members based on what other companies in New Jersey pay their executives (Washington Post, 12/10).