Professional review organizations (PROs) have been reviewing hospital admissions on diagnosis-related groups (DRGs) 294 and 295 (uncomplicated diabetes mellitus) at the direction of the Health Care Financing Administration (HCFA) to control inappropriate hospital admissions. Because of the possibility of an adverse effect from this policy on the quality of medical care for people with diabetes, letters were sent and/or telephone calls were made to each PRO to request information on denials of admissions or of reimbursement for the hospitalization of patients with diabetes. The answers revealed variations in PRO review procedures, little attention to quality of care, and an apparently inadequate data retrieval system. These inadequacies of the Medicare Prospective Payment System (PPS), which currently obscure its impact on the quality of the hospital care of diabetic patients, can be remedied.

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