In 1996, the Centers for Medicare & Medicaid Services (CMS) initiated the Medicare Health Outcomes Survey (HOS). It is the first national survey to measure the quality of life and functional health status of Medicare beneficiaries enrolled in managed care. The program seeks to gather valid and reliable health status data in Medicare managed care for use in quality improvement activities, public reporting, plan accountability and improving health outcomes based on competition. The context that led to the development of the HOS was formed by the convergence of the following factors: 1) a recognized need to monitor the performance of managed care plans, 2) technical expertise and advancement in the areas of quality measurement and health outcomes assessment, 3) the existence of a tested functional health status assessment tool (SF-36)1, which was valid for an elderly population, 4) CMS leadership, and 5) political interest in quality improvement. Since 1998, there have been six baseline surveys and four follow up surveys. CMS, working with its partners, performs the following tasks as part of the HOS program: 1) Supports the technical/scientific development of the HOS measure, 2) Certifies survey vendors, 3) Collects Health Plan Employer Data and Information Set(HEDIS)2 HOS data, 4) Cleans, scores, and disseminates annual rounds of HOS data, public use files and reports to CMS, Quality Improvement Organizations (QIOs), Medicare+Choice Organizations (M+COs), and other stakeholders, 5) Trains M+COs and QIOs in the use of functional status measures and best practices for improving care, 6) Provides technical assistance to CMS, QIOs, M+COs and other data users, and 7) Conducts analyses using HOS data to support CMS and HHS priorities.CMS has recently sponsored an evaluation of the HOS program, which will provide the information necessary to enhance the future administration of the program. Information collected to date reveals that the HOS program is a valuable tool that provides a rich set of data that is useful for quality monitoring and improvement efforts. To enhance the future of the HOS program, many stakeholders recommend the implementation of incentives to encourage the use of the data, while others identify the need to monitor the health status of plan disenrollees.Overall, the HOS program represents an important vehicle for collecting outcomes data from Medicare beneficiaries. The new Medicare Prescription Drug, Improvement, and Modernization Act (2003) mandates the collection and use of data for outcomes measurement. Consequently, it is important to improve HOS to most effectively meet the mandate.