Background Health Care Quality  Measures As we have previously reported in reviews of health care quality outside  of the MHS, health care quality measures are standard, evidence-based  metrics designed to assess the extent to which patients receive health  care that increases the likelihood of desired health outcomes and are  consistent with current professional knowledge. These measures may  be used to assess the quality of care in various settings, including  hospitals and physician offices. Health care quality measures are  intended to (1) inform providers about opportunities for potential  improvements in their delivery of care, (2) encourage or incentivize  providers to consistently provide high quality care, and (3) inform  consumers about which providers are most likely to deliver high quality  care. There are broad categories of clinical quality measures that address  various aspects of quality of care. See table 1 for a description of these  broad categories of quality measures. The data used to calculate the results of health care quality measures can  come from a number of different sources. Some measures often require  detailed clinical information obtained from patient medical records, such  as process measures that indicate whether timely and effective care was  provided in a specific situation, for example, or whether stroke patients  received clot-dissolving medication appropriately. Other measures are  designed to use information on patient demographics and diagnoses that  can be obtained from more readily accessible sources, such as claims  data or other administrative data that have already been collected for  other purposes such as billing. In addition, patients can be asked directly,  usually through surveys, to report on their experiences receiving care. The MHS Structure and  Administration of Direct  and Purchased Care The MHS is a complex organization in which responsibility for the delivery  of health care is primarily shared among the military services—Army,  Navy, and Air Force—and the Defense Health Agency (DHA). The  Army, Navy and Air Force medical commands report through their service  chiefs to their respective military department Secretaries and then to the  Secretary of Defense. DHA reports through the Office of the Assistant  Secretary of Defense for Health Affairs and the Under Secretary of  Defense for Personnel and Readiness to the Secretary of Defense. The  Office of the Assistant Secretary of Defense for Health Affairs manages  the Defense Health Program appropriation, which funds the medical and  health care programs at the medical commands of the military services.  As of fiscal year 2018, most of the MTFs, including military hospitals and  clinics, were under the direction and control of the military services, which  are responsible for staffing, training, and equipping those MTFs to meet  mission requirements. DHA has responsibility for the managed care  support contracts through which the MHS administers its purchased care,  and DHA also administers several MTFs in the vicinity of Washington,  DC. Figure 1 depicts the MHS organizational structure. Recently enacted changes will affect the administration of the MTFs in  future years. Most notably, DOD will alter administration of the MTFs,  shifting responsibility from the military services to DHA. Section 702 of the  National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017)  directed DOD to give DHA responsibility for the administration of all  MTFs, including budgetary matters, information technology, and health  care administration and management. In the conference report for  NDAA 2017, Congress stated its intention that the creation of a single  agency responsible for all MTFs would improve and sustain readiness,  reduce costs, and increase efficiency. DOD has since prepared a series  of implementation plans as it works to develop the specific policies and  procedures to enable this change to take effect starting October 1, 2018.  The most recent plan issued by DOD in June 2018 envisions a 3-year  transition to be completed October 1, 2021. For purchased care, DOD contracts with civilian health care contractors to  manage its civilian providers on a regional basis. The primary  responsibilities of these managed care support contractors include the  following: developing civilian provider networks, which include hospitals and ensuring adequate access to health care;  referring and authorizing beneficiaries to receive health care; processing health care claims; educating providers and beneficiaries; and  conducting utilization management and quality management  programs. There have been several generations of multi-year contracts since 1996.  In July 2016, DOD awarded its fourth generation of managed care  support contracts to two regional contractors, and on January 1, 2018, the  MHS began health care delivery under these contracts. Selection of Measures to  Assess Quality of Direct  and Purchased Care According to our review of DOD documents, the MHS uses a structured  process to select the measures on its dashboards that are used to assess  the quality of direct and purchased care. Specifically, DOD documents  state that the core direct care measures that are on the Core Dashboard  are selected through the MHS’s performance management system called  Partnership for Improvement (P4I), which began in 2015. The  documents show that proposals for potential quality measures are  developed by work groups that focus on different specialized areas, such  as maternity care or mental health. These proposals are reviewed and  approved by the Steering Committee for P4I, which develops the list of  core quality measures for direct care. The Steering Committee then  presents the list of core quality measures to a succession of governance  bodies—each of which incorporates representation from the three military  services plus DHA—for review and approval. DOD documents indicate  that the MHS repeats this process annually as it decides which quality  measures to add, drop, or modify for the coming fiscal year from the Core  Dashboard. The DOD documents we reviewed lay out a parallel process that the MHS  follows to select which purchased care quality measures will be tracked in  the Purchased Care Dashboard. A work group that specializes on  purchased care issues with representation of DHA and the three military  services develops the proposed list of quality measures for the Purchased  Care Dashboard. This list is then reviewed and approved by the same  succession of governance bodies that decide on the Core Dashboard  measures. Officials told us and DOD documents confirmed that the MHS and the  purchased care contractors also track additional quality measures that  are not included in the Core and Purchased Care Dashboards. For  example, MHS clinicians who provide maternity care track a set of  measures developed by the National Perinatal Information Center.  Similarly, a number of military hospitals report on surgical quality  measures to the National Surgical Quality Improvement Program. The  MHS also conducts surveys of MHS beneficiaries from which it obtains  data for patient experience measures for both direct and purchased care.  Additionally, the MHS requires the managed care support contractors that  administer the MHS’s networks of civilian providers for purchased care to  monitor several different sets of quality measures or indicators, many of  which focus on patient safety. These include patient safety indicators,  hospital acquired conditions, and serious reportable events. They also  analyze measures selected from Hospital Compare and the Healthcare  Effectiveness Data and Information Set (HEDIS), some of which  correspond to measures included in the Core and Purchased Care  Dashboards. The Hospital Compare  and Core Quality  Measures Collaborative  Measure Sets Adopted by  Medicare and Private  Health Insurers While health care systems in the United States can use a variety of  measures to assess the quality of care, two of the most widely adopted  sets of quality measures include the Hospital Compare measure set  developed by Centers for Medicare & Medicaid Services (CMS) for  inpatient care and the CQMC measure sets jointly developed by CMS  and major private health insurers for outpatient care. Since 2005, CMS  has collected results for individual hospitals on a specific list of health  care quality measures that are posted on a website known as Hospital  Compare. CMS does this to make comparable information on the quality  of care provided by different hospitals publicly available. Hospital  Compare currently covers more than 4,000 hospitals that participate in  the Medicare program. These hospitals supply data to CMS for quality  measures of inpatient and emergency department care. These data  reflect the care provided to all patients treated at these hospitals, not just  those covered by Medicare. Each year CMS goes through a formal  process, including receiving input from experts and stakeholders, to  review and revise the mix of quality measures that these hospitals are  expected to report. The purpose of this review, according to CMS, is to  ensure that the set of measures reported on Hospital Compare provides  meaningful information for quality improvement while reducing  unnecessary administrative burden. Initiated in 2014, the CQMC is a multi-stakeholder voluntary effort  focused on quality measure alignment that has developed eight sets of  measures for outpatient primary and specialty care, known as the CQMC  measure sets. In developing the measure sets, CMS and private health  insurers negotiate sets of core measures on which they agree to focus on  measuring care quality for certain conditions. Physician specialty  societies, employer groups, consumer groups, and regional collaboratives  also participate in the negotiations. The CQMC measure sets have been  adopted by CMS for Medicare and by 15 major private health insurers for  commercial health plans. Additionally, section 728 of the NDAA 2017  directs the MHS to use, to the extent appropriate, these quality measures  to assess the quality of direct and purchased care. CQMC documents  show that the members of the CQMC intend to continually update these  core measure sets as more meaningful measures are developed over  time. CMS and the private health insurers plan to expand their application  of these measures incrementally, as CMS conducts its annual reviews of  Medicare’s quality measures and the insurers update or renew their  contracts with different providers. The MHS Does Not  Use a Common Set  of Quality Measures  for Direct and  Purchased Care, and  the Measures It Uses  Assess a Limited  Range of Quality  Areas The MHS does not use a common set of measures on its Core and  Purchased Care Dashboards to assess the quality of care provided  through direct and purchased care. In addition, for both direct and  purchased care, the MHS uses measures on its dashboards that assess  a more limited range of quality care areas and medical conditions as  compared to the Hospital Compare and CQMC measures adopted by  Medicare and private health insurers. The MHS Does Not Use a  Common Set of Quality  Measures for Direct and  Purchased Care Although the NDAA 2016 directed the MHS to align its quality measures  for direct and purchased care, we found that as of March 31, 2018, the  MHS used separate sets of measures on the Core and Purchased Care  Dashboards to assess the quality of care delivered in direct and  purchased care, respectively. To assess the quality of direct care, the  MHS tracks 43 measures on its Core Dashboard, and to assess the  quality of purchased care, the MHS tracks 18 measures on its Purchased  Care Dashboard. The MHS tracks 8 measures that are the same for both  dashboards, leaving 35 measures tracked only on the Core Dashboard  for direct care and 10 measures tracked only on the Purchased Care  Dashboard for purchased care. (See fig. 2.) According to MHS officials, since launching the P4I performance  management system in 2015, the MHS has focused on making  systematic improvements in the quality of care across the MTFs in direct  care. As a result, the 43 measures they have chosen for the Core  Dashboard reflect their priorities for quality improvement within direct care  only. In the case of purchased care, MHS officials stated that requiring  civilian providers to report on the same 43 measures that are used on the  Core Dashboard for direct care would add burden, and the MHS had  concerns that this would make civilian providers less likely to participate  in purchased care. Instead, the MHS tracks 18 measures on the  Purchased Care Dashboard that rely on information sources other than  provider reporting, such as claims that the providers submit in the normal  course of receiving payment for their services and surveys that the MHS  conducts of its beneficiaries. MHS officials explained that they try to  minimize the reporting burden for purchased care providers because for  most of these civilian providers, eligible MHS beneficiaries represent only  a small proportion of their patient population. We also found that for direct care, the MHS uses its quality measures on  the Core Dashboard to assess the quality of care delivered to  beneficiaries served by individual MTFs, such as hospitals or clinics.  However, for purchased care, the MHS uses its quality measures on the  Purchased Care Dashboard to assess the quality of care delivered to the  beneficiary population served by each contractor’s network as a whole– not the quality of care delivered by individual civilian hospitals, clinicians,  or other providers in the network. Specifically:  In direct care, the MHS uses the 43 measures on the Core Dashboard  to track the quality of care delivered by individual MTFs. For example,  on a measure of central line-associated bloodstream infections, the  MHS tracks the incidence of such infections by individual MTF and by  military service (i.e., the incidence of such infections in Army, Navy  and Air Force MTFs). In contrast, in purchased care, the MHS assesses information on the  18 measures on the Purchased Care Dashboard for all beneficiaries  in each of the networks administered by the two managed care  support contractors. For example, on a measure of the percentage of  beneficiaries with diabetes who have their hemoglobin level tested  annually, the MHS calculates an overall rate of hemoglobin testing  across all the diabetic patients that receive care in each contractor’s  network. The beneficiary population-level reporting on quality measures on the  Purchased Care Dashboard reflects the nature of the MHS’s relationship  with its managed care support contractors for purchased care. Under the  terms of the contracts that the MHS has negotiated with the contractors  that administer the networks of civilian providers to care for eligible  beneficiaries, the contractors bear responsibility for ensuring the quality of  care delivered by those providers. While the MHS requires the managed  care support contractors to monitor different sets of quality measures or  indicators, such as patient safety indicators, hospital acquired conditions,  and serious reportable events to identify possible cases of individual  patient harm and determine appropriate interventions, the contractors  report this information in annual reports to the MHS for their network as a  whole, as opposed to reporting on individual providers. Because the MHS largely uses separate measures for direct and  purchased care on its dashboards and tracks the quality of care delivered  by civilian providers in purchased care in the aggregate rather than  individually, the MHS lacks the information it needs to make comparable  assessments of the quality of care delivered across the MHS as a whole.  This, in turn, limits the MHS’s ability to ensure it has the information  needed to determine whether it is achieving the department’s overall  strategic goals of providing high quality care across the MHS as a whole  and ensuring that beneficiaries receive a consistent level of high quality  care regardless of whether that care is delivered in direct or purchased  care. Moreover, using a different set of quality of measures on the  dashboards for direct and purchased care is inconsistent with section 730  of the NDAA 2016, which directs the MHS to align its measures for direct  and purchased care so it can reduce performance variation across the  MHS. MHS officials acknowledge in principle the value of using aligned  measures to assess quality of care in direct and purchased care, but the  officials cited a range of factors that pose challenges to achieving this  objective, such as the large number of civilian providers and the lack of  common health information technology systems. Based on our review, we found that one way the MHS could have a  common set of quality measures for both direct and purchased care,  without increasing the reporting burden on civilian providers, would be to  use, as appropriate, Hospital Compare and CQMC quality measures.  Notably, the MHS states on its website that almost all of the civilian  hospitals that are in the contractors’ networks for purchased care already  report information on the measures posted on the Hospital Compare  website. As a result, there potentially would be no additional burden for  these purchased care providers to report information on the Hospital  Compare quality measures. Similarly, major health plans report that they  have begun implementing the CQMC measure sets in their contracts with  physicians, meaning that physicians participating in those plans already  report information on CQMC outpatient quality measures. To the extent  that those physicians are also in the MHS contractors’ networks for  purchased care, the information the physicians report on the CQMC  measures could be used by the MHS. We found the MHS is already using some Hospital Compare and CQMC  measures for inpatient and outpatient care. There are a total of 76  measures that Medicare and private health insurers report to Hospital  Compare and a total of 60 CQMC outpatient measures. Besides the  measures used in the Core and Purchased Care Dashboards, MHS also  collects 24 of 76 Hospital Compare measures and 10 of the 60 CQMC  outpatient measures. For the most part, these measures are not part of  the direct and purchased care dashboards that MHS leadership uses to  assess the performance of direct and purchased care. Furthermore, MHS  officials told us that they have no specific plans to increase the number of  measures that the MHS uses from Hospital Compare for inpatient care  delivered in its hospitals. In the case of outpatient care, our review of  DOD documents shows that the MHS plans on expanding reporting to  only 5 more CQMC quality measures, in large part to minimize its  reporting burden. The MHS Uses Quality  Measures that Assess a  Limited Range of Quality  Care Areas and Medical  Conditions Compared to  Measures Adopted by  Medicare and Private  Health Insurers We found that the measures the MHS uses on its Core and Purchased  Care Dashboards to assess the quality of direct and purchased care  address only a limited range of quality areas and medical conditions when  compared with the Hospital Compare and CQMC measure sets that are  adopted by Medicare and private health insurers. According to the  National Quality Forum, which plays a central role in developing and  annually reassessing the Hospital Compare measure set and also was  consulted in the development of the CQMC measure sets, the measures  used to assess quality of care should comprise an appropriate mix of  recognized measure types, including outcome measures, process  measures, experience of care measures, and cost and structure  measures. These measures should cover a broad enough range of  measure types and medical conditions so that they provide an accurate  overall assessment of the quality of care patients receive. Based on our analysis, Table 2 below shows the limited range of  measures on the Core and Purchased Care dashboards used by the  MHS to assess inpatient care, as compared to the range of inpatient  measures that Medicare hospitals report for Hospital Compare. In  general, each of the five types of measures shown in the table below  addresses different aspects of health care quality in hospital settings. For  direct care, the MHS uses no more than one measure on its Core  Dashboard for all of these five measure types except for “Outcome”  measures; for purchased care, the MHS does not use any inpatient care  measures on its Purchased Care Dashboard. Similarly, based on our analysis, Table 3 below shows the limited range  of measures on the Core and Purchased Care Dashboards used by the  MHS to assess outpatient care, as compared to the range of outpatient  measures that are part of the CQMC measure sets adopted by Medicare  and private health insurers. The MHS uses measures on its dashboards  that assess fewer clinical focus areas and medical conditions as  compared with those measures included in the CQMC measure sets. As  with hospital care, the difference is greatest with respect to purchased  care. The limitations we found in the quality measures used by the MHS—the  relatively narrow range of measures as well as the relatively few  measures used across direct and purchased care—reflect the MHS’s  priorities in selecting quality measures. In short, the MHS focuses on the  value and impact of implementing individual measures, but does not  prioritize aligning the measures used across direct and purchased care or  expanding the range of medical conditions and quality areas covered in  the aggregate by the measures. The MHS’s annual assessment of quality  measures focuses only the Core Dashboard measures. For each Core  Dashboard measure for which a change is under consideration—such as  dropping, modifying, or adding another quality measure to the Core  Dashboard—MHS officials apply a standard set of criteria involving both  the feasibility of collecting the data needed for that measure and the utility  of that measure for addressing a strategic priority or promoting  performance improvement. When asked about the potential value of  increasing the number of Hospital Compare measures, MHS officials said  they need to make a value-based determination of whether the benefits of  obtaining results for any given Hospital Compare measure justified the  costs of collecting and transmitting the data required for that measure. In  discussions about potential measures for the Purchased Care  Dashboard, MHS officials also focused on the characteristics of specific  measures being considered for inclusion in the dashboard. Because the MHS does not prioritize expanding the range of medical  conditions and quality areas covered by common measures across direct  and purchased care, the measures the MHS uses provide DOD’s senior  health care leadership with an incomplete picture of the quality of care  across the MHS. As we have noted, the MHS has reported to the  Congress that its DOD health care leaders rely on the Core and  Purchased Care Dashboard measures to establish accountability  throughout the MHS and identify areas where quality improvement is  needed. However, the current approach may not lead to the selection of  quality measures for the two dashboards that would enable MHS officials  to identify the most critical quality of care issues in the MHS. The lack of  that information, in turn, limits the ability of DOD’s senior health care  leadership to target their performance improvement efforts most  effectively in support of DOD’s overall strategic goals of providing high  quality care across the MHS as a whole. The MHS Has  Established  Performance  Standards and  Related Corrective  Action Requirements  for Individual  Providers in Direct  Care but Not in  Purchased Care The MHS has established performance standards in direct care related to  the Core Dashboard measures and has corrective action requirements for  MTFs that do not meet the standards. However, the MHS has not  established performance standards related to the Purchased Care  Dashboard measures for individual civilian providers in purchased care  and therefore does not have related corrective action requirements for  these providers. The MHS Has Established  Direct Care Performance  Standards and Related  Corrective Action  Requirements for Military  Treatment Facilities As part of its P4I performance management system for direct care, the  MHS has established specific performance standards that each MTF  must meet in delivering quality care to MHS beneficiaries. These  standards—some of which are under development—specify a minimum  level of performance that each MTF should achieve related to the Core  Dashboard quality measures tracked in direct care. For example, in the  case of the HEDIS All Cause Readmission measure on the Core  Dashboard, the MHS’s performance standard is that MTFs should have a  rate of unplanned acute readmissions within 30 days of an initial hospital  admission that is as good as or better than the national 75th percentile.  This performance standard is based on the readmission rates that the  National Committee for Quality Assurance, the lead entity for that  measure, has observed across U.S. hospitals. During regularly recurring governance meetings throughout the year,  MHS governance bodies review how MTFs have performed relative to the  performance standards for the Core Dashboard measures. Our review  found that during these meetings, the governance bodies generally do not  examine the circumstances of MTFs that do not perform well on the  performance standards related to the Core Dashboard measures.  Consequently, DOD’s senior health care leadership within the  governance bodies may receive limited information on the challenges  faced by low-performing individual MTFs. However, during these  meetings, officials from the military services and DHA highlight MTFs that  are performing well on the established performance standards, and the  officials share best practices and specific strategies used to achieve high  performance. We also found that in direct care, the MHS requires MTFs that do not  meet the MHS’s performance standards related to its Core Dashboard  measures to take corrective actions to improve the quality of care they  deliver. The military services—Army, Navy and Air Force—and DHA have  been responsible for implementing this requirement. For example, Navy  officials explained that they periodically review information collected on  the MHS’s Core Dashboard quality measures to analyze areas where  MTFs do not meet established performance standards tied to these  measures and to oversee MTFs’ efforts to correct these deficiencies.  Officials told us that each of the services exercises its discretion to  independently develop and implement the corrective actions that the  service determines best address the performance issues identified  through the use of the MHS’s quality measures. For example, to help  reduce the number of Central Line-Associated Bloodstream Infections  (CLABSI), the Army began financially awarding MTFs that performed well  on the CLABSI measure, whereas the Air Force developed a toolkit to  help providers prevent CLABSI. As the MHS moves to transfer administration of the MTFs from the  individual military services to DHA as directed by section 702 of the  NDAA 2017, the approach for assessing performance and implementing  corrective actions is likely to change. The MHS’s recently issued  implementation plan as of June 2018 outlines some alterations to the  current performance assessment process. Specifically, MTFs will create  and submit a performance plan that will be reviewed and approved by  DHA. DHA will host monthly review sessions with MTFs to track  performance on the plan. MTFs will be evaluated using a set of measures  aligned to the Quadruple Aim that will include many but not all of the Core  Dashboard measures. The MHS Has Not  Established Performance  Standards and Related  Corrective Action  Requirements for  Individual Civilian  Providers in Purchased  Care The MHS has not established performance standards related to the 18  Purchased Care Dashboard measures for individual civilian hospitals,  clinicians, or other providers in purchased care. Instead, the MHS has  established performance standards related to the 18 Purchased Care  Dashboard measures that MHS officials use to track the performance of  each of the two managed care support contractors. According to MHS  officials, the MHS does not require the contractors to ensure that each  individual hospital, physician, or other provider in these networks meets  the performance standards related to the Purchased Care Dashboard  measures. For example, in the case of a measure on the use of imaging  for low back pain, the MHS has set a performance standard for each  managed care support contractor, one that aims at avoiding excessive  imaging across the beneficiary population in the contractor’s network.  However, officials told us that the information that the MHS collects on the  measure—the number of beneficiaries in each of the contractors’  networks who receive imaging services for low back pain—does not  indicate the extent to which each individual civilian provider in the  contractor networks meets or fails to meet the performance standard.  Thus, the information the MHS obtains on the quality measure and its  related performance standard does not identify which hospitals, clinicians,  or other providers need to improve their performance in order for all  beneficiaries to receive the expected level of care quality that the  performance standard represents. Because the MHS has not established performance standards related to  the Purchased Care dashboard measures for individual civilian hospitals,  clinicians, or other providers in purchased care, there are no related  requirements for corrective action. Instead, the MHS requires its  managed care support contractors to undertake other activities to  promote improved quality of care across civilian providers in their  networks. These include investigations of quality issues, focused reviews,  analyses of Hospital Compare data, and value-based purchasing pilots,  as discussed further below. However, our review found that these efforts  are not applied comprehensively across all individual purchased care  providers. Investigations of Quality Issues. One approach the MHS uses to promote  improved quality of care across purchased care providers is to direct its  managed care support contractors to investigate whether individual  beneficiaries have experienced what the MHS refers to as a quality issue.  Potential quality issues are defined by the MHS as any instance when  there are indications that a purchased care provider has deviated from  what the managed care support contractors deem acceptable standards  of professional practice. The contractors can identify these potential  quality issues through beneficiary complaints; analyses of patient safety  indicators, hospital acquired conditions, and serious reportable events; or  by the MHS or contractor staff. Once potential quality issues are  identified, they are investigated by a clinician, who reviews the patient’s  complete medical record. Based on the clinician’s review of the patient’s  medical records, the clinician verifies whether or not a quality issue has  occurred and, if so, assigns the quality issue a severity level. To  address the quality issue, the managed care support contractors may  take a range of steps, including educating the provider, monitoring the  provider, notifying the appropriate state or federal bodies, and removing  the provider from the MHS’s purchased care provider network. In  practice, however, MHS officials said and documents we reviewed show  that providers are rarely removed from the network. For example, MHS  officials reported that one contractor estimated that one provider was  removed from its network over quality issues every 1 to 2 years. Focused Reviews. Another way the MHS uses its managed care support  contractors to promote improved quality of care across purchased care  providers is through focused reviews. During these reviews, the managed  care support contractors review the medical records for a selected patient  population to determine the extent to which a specified quality concern is  a widespread problem. For example, in 2015 one contractor reviewed the  medical records of 96 beneficiaries to determine the frequency of  obstetric trauma, an injury related to vaginal deliveries. If a focused  review determines that there is a widespread quality problem, the  contractor may implement a quality improvement initiative designed to  prompt all of its network providers to address that concern, as opposed to  targeting specific providers. Analyses of Hospital Compare Data. The MHS also requires the  contractors to conduct an annual examination of the performance of  hospitals in their networks on the different quality measures reported on  Medicare’s Hospital Compare. However, the managed care support  contractors have considerable flexibility in deciding how to structure these  analyses and how to follow-up on results. Consequently, the two  managed care support contractors have adopted different analytical  approaches to define and identify hospitals with relatively low  performance. For example, the managed care support contractors  chose to examine different quality measures and use different criteria to  identify hospitals with relatively low performance. In their most recent  annual reports issued during 2017, both managed care support  contractors indicated that they were considering contacting the lower  performing hospitals to prompt remedial action, but because no action  had yet occurred, the reports leave open what steps were ultimately taken  and how these hospitals responded. Nonetheless, these activities  suggest that the managed care support contractors have the ability to use  Hospital Compare to analyze and address individual provider  performance on a standard set of quality measures. However, the MHS  has not specified how this process should proceed, leaving it to the  managed care support contractors to decide what and how much they will  do in conducting these analyses of individual hospitals. Value-Based Purchasing Pilots. The MHS has recently begun to test  different approaches to incentivize purchased care providers to deliver  high quality care through several value-based purchasing pilots. For  example, in February 2018 the MHS launched a maternity care pilot that  pays providers more for better performance on specified quality  measures. The pilot also implements a ‘steerage model’ approach that  identifies higher performing providers in directories provided to patients  by indicating providers as “Gold Stork” or “Silver Stork.” These pilots may  provide the MHS another way to influence the quality of care provided by  certain subsets of its purchased care providers. MHS officials stated that  although DOD has not arrived at specific goals, it plans to expand these  pilots to cover around 20 to 25 percent of its purchased care services by  2020. The use of performance standards and corrective action requirements for  individual hospitals, clinicians, or other providers who serve MHS  beneficiaries is consistent with federal internal control standards for  monitoring, which state that management should establish monitoring  activities, evaluate the results, and remediate any deficiencies. While  the MHS has established performance standards related to its Core  Dashboard measures in direct care and has corrective action  requirements for MTFs that do not meet those standards, it has not done  so for individual civilian hospitals, clinicians, or other providers in  purchased care related to its Purchased Care Dashboard measures.  Additionally, if the MHS aligned quality measures on the Core and  Purchased Care Dashboards at the provider level, the MHS could require  its managed care support contractors to monitor the performance of  individual civilian providers relative to set performance standards  comparable to the ones that the MHS has established for MTFs. This  approach would allow the MHS to determine the extent of performance  variability, both among individual civilian providers and across MTFs and  individual civilian providers. By not establishing consistent performance  standards at the provider-level for direct and purchased care and  requiring corrective action requirements to ensure that these standards  are met by providers in both direct and purchased care, the MHS is  limited in its ability to address variation in the quality of care delivered.  This further limits the MHS’s ability to ensure that it is achieving the  department’s overall strategic goals of providing high quality care across  the MHS as whole and ensuring that beneficiaries receive a consistent  level of high quality care regardless of whether that care is delivered in  direct or purchased care. Conclusions Congress directed DOD to reduce variation in the quality of care  beneficiaries receive through the MHS. DOD has taken important steps  towards this goal by identifying a set of core measures that DOD senior  health care leadership use to assess quality of care in direct care and  another set of measures that they use to assess quality in purchased  care. DOD health care leaders rely on these measures on their Core and  Purchased Care Dashboards to establish accountability throughout the  MHS and identify areas where quality improvement is needed. However,  with few exceptions, the MHS uses different measures on its Core and  Purchased Care Dashboards to assess the quality of direct and  purchased care, making it difficult to determine the extent to which it is  ensuring consistent quality across the MHS as a whole. Furthermore, for  both direct and purchased care, the MHS uses measures on its  dashboards that assess a limited range of quality areas and medical  conditions when compared to the widely used quality measure sets  adopted by Medicare and private insurers. Without using a broader range  of available quality measures available—measures that many purchased  care providers already report to CMS and private health insurers—DOD is  missing an opportunity to better target the most critical quality of care  issues in the MHS. The limitations we identified in the MHS’s Core and  Purchased Care Dashboard quality measures reflect the fact that in its  annual measure selection process, the MHS does not prioritize aligning  the quality measures across direct and purchased care and expanding  the range of measures it uses across the two systems of care. Finally, our review shows that while DOD has established performance  standards for the core measures in direct care and corrective action  requirements for MTFs that do not meet these standards, DOD has not  done so for individual purchased care providers. Notably, DOD does not  set clear expectations that individual purchased care providers should  meet the performance standards related to the quality measures on the  Purchased Care Dashboard. Performance standards and related  corrective action requirements are critical for holding both MTFs and  individual civilian providers accountable for providing quality care. Without  consistent standards and related corrective action requirements across  the MHS, DOD is limited in its ability to ensure that beneficiaries  consistently receive high quality care, regardless of whether they receive  that care in the direct or purchased care systems. Recommendations for  Executive Action We are making two recommendations to the Assistant Secretary of  Defense for Health Affairs. As MHS governing bodies conduct their recurring reviews of quality  measures selected for MHS’s Core Dashboard and Purchased Care  Dashboards, the Assistant Secretary of Defense for Health Affairs should  direct those bodies to prioritize, as appropriate, the selection of measures  that apply to both direct and purchased care at the provider level and that  expand the range of quality measure types and medical conditions that  are assessed. (Recommendation 1) The Assistant Secretary of Defense for Health Affairs should establish, as  appropriate, performance standards related to the Purchased Care  Dashboard measures that are consistent with the MHS’s performance  standards for direct care; ensure they are applied to individual purchased  care providers; and take steps, such as amending its managed care  support contracts, if necessary, to require corrective actions to be taken  when providers do not meet those standards. (Recommendation 2) Agency Comments  and Our Evaluation We provided a draft of this report to DOD for review, and DOD provided  written comments, which are reprinted in appendix I. In its written  comments, DOD concurred with both of our recommendations. With  regards to the first recommendation, DOD stated that it plans to enhance  the process for selecting quality measures that apply to both direct and  purchased care; optimize use of data on Hospital Compare to expand the  types and medical conditions evaluated; augment their governance  reporting structure so that senior leadership can review quality measures  included on the Core Dashboard and Purchased Care Dashboard; and  implement the CQMC measure sets for outpatient care. Additionally, DOD  stated that it has efforts underway to create a library of all quality  measures used across direct and purchased care. With regards to the second recommendation, DOD acknowledged the  need to strengthen accountability for meeting performance standards that  apply to both direct and purchased care providers.  It also agreed that  measures of individual provider performance in purchased care should be  augmented and consistent with measures in direct care, where possible.  DOD noted, however, that because it works through managed care  support contractors for purchased care, it can hold the contractors  accountable for meeting performance standards but cannot currently take  action against individual providers based solely on performance. Instead,  DOD stated that rather than taking a corrective action approach, it plans  to expand its value-based purchasing efforts and incentivize providers  that meet and exceed certain quality standards.  This raises concerns, as  DOD’s current plans to expand its value-based purchasing efforts would  only be applicable for between 20 and 25 percent of the services MHS  beneficiaries receive from purchased care providers by 2020, as we  noted in our report. Without having all providers managed consistently  and subject to prompt remediation of deficiencies, DOD is missing an  opportunity to improve the quality of purchased care, and it increases the  risk that not all beneficiaries will receive a consistent level of high quality  care across the MHS. Acknowledging DOD’s comment that it cannot  currently take action against individual providers based solely on  performance, we have modified our recommendation to clarify that DOD  should take the steps it determines are necessary, such as amending its  managed care support contracts, to institute corrective action  requirements for purchased care providers. We are sending copies of this report to the Secretary of Defense and  appropriate congressional committees. The report is also available at no  charge on GAO’s website at http://www.gao.gov. If you or your staff has any questions regarding this report, please contact  me at (202) 512-7114 or silass@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix II. Appendix I: Comments from the Department  of Defense Appendix II: GAO Contact and Staff  Acknowledgments GAO Contact Staff  Acknowledgments In addition to the contact named above, Rashmi Agarwal, Assistant  Director; Eric Peterson Analyst-in-Charge; Muriel Brown; Shaunessye  Curry; Michael Erb; Krister Friday; Jacquelyn Hamilton; and Colbie  Holderness made key contributions to this report. Related GAO Products Defense Health Reform: Steps Taken to Plan the Transfer of the  Administration of the Military Treatment Facilities to the Defense Health  Agency, but Work Remains to Finalize the Plan. GAO-17-791R.  Washington, D.C.: Sep 29, 2017. Health Care Quality: HHS Should Set Priorities and Comprehensively  Plan Its Efforts to Better Align Health Quality Measures. GAO-17-5.  Washington, D.C.: Oct 13, 2016. VA Health Care Quality: VA Should Improve the Information It Publicly  Reports on the Quality of Care at Its Medical Facilities. GAO-17-741.  Washington, D.C.: Sep 29, 2017.
The National Defense Authorization Act for fiscal year 2016 contains provisions for GAO to review DOD's plans to (1) improve the experience of beneficiaries who receive care through military hospitals and clinics or from civilian providers and (2) reduce variation in the quality of care. In this report, GAO examines (1) measures DOD uses to assess the quality of direct and purchased care, and (2) the extent to which DOD has established performance standards related to the measures and corrective action requirements for providers who do not meet those standards. GAO reviewed the measures in DOD's Core Dashboard for direct care and Purchased Care Dashboard for purchased care. It also reviewed DOD documents and reports to Congress, and interviewed MHS officials, including officials from the Army, Navy, and Air Force. GAO also compared the quality measures DOD uses to those used in Medicare and by private insurers, which have been vetted by multiple stakeholders. GAO assessed DOD's use of performance standards and corrective action requirements in the context of federal internal control standards. The National Defense Authorization Act for fiscal year 2016 (NDAA 2016) directed the Department of Defense (DOD) to align its measures of health care quality used in the Military Health System (MHS) to improve beneficiary experience and reduce variation in the quality of care. GAO reviewed the quality measures DOD identified in March 2017 in response to the NDAA 2016; DOD senior leadership tracks these measures on dashboards to gauge progress on MHS strategic goals. GAO found that DOD does not use a common set of measures on its dashboards to assess the quality of care provided by either military hospitals and clinics—known as direct care—or networks of civilian hospitals and other providers, known as purchased care. (See figure.) As a result, DOD's senior leadership has limited information on the extent to which MHS beneficiaries receive consistently high quality care across the MHS. Furthermore, for both direct and purchased care, DOD uses measures on its dashboards that track a limited range of quality care areas and medical conditions compared to the measures adopted by Medicare and by private health insurers. For example, whereas civilian hospitals report to Medicare information on 11 measures of patients' self-reported experience in hospitals, Military hospitals report only 1 such measure. By using a limited range of quality measures, DOD may not detect key quality issues. Further, when selecting quality measures, the MHS does not prioritize using common measures across direct and purchased care or expanding the range of measures it uses. GAO also found that for direct care DOD has established performance standards and corrective action requirements for military hospitals or clinics that do not meet those standards in direct care. The performance standards indicate the level of performance providers should meet on the various quality measures DOD tracks on its dashboards, and the corrective action requirements instruct providers to take steps to improve care. However, for purchased care, DOD has not established similar performance standards for individual providers. Without consistent performance standards and corrective action requirements, DOD is limited in its ability to address variation in the quality of care delivered and help ensure that its beneficiaries receive consistent high quality care across the MHS.