The Peer Review Improvement Act of 1982 called upon the Health Care Financing Administration (HCFA) to ensure quality of care within the Medicare program. HCFA contracts with peer review organizations (PROs) in each state to monitor the quality of hospital care for Medicare patients. This study aims to determine how well one state's PRO judged the quality of hospital care compared with an independent, credible judgment of quality of care. A common feature of PROs is the random audit of hospital records for possible problems using six categories of generic quality screens performed by nurses to identify records for further review by a physician. These six categories are (1) adequacy of discharge planning, (2) medical stability at discharge, (3) death, (4) nosocomial infection, (5) unscheduled return to surgery, and (6) trauma in the hospital. Using the specific screens in these categories as well as others that they may add if they like, the PROs identify medical records to refer to physicians to determine if there is a quality problem.