Tiered physician network pits organized medicine vs. United

Pressure from doctors has the plan rethinking its methods, but many say the number of insurers grouping physicians on cost and quality will only increase.

By Robert Kazel — Posted March 7, 2005

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Al Elbendary, MD, a St. Louis ob-gyn, gets a star by his name on the UnitedHealthcare Web site. He does not consider it an honor.

Dr. Elbendary got the notation because United considers him a "performance" physician. Under a new plan United would manage for self-insured employers, patients get a discount on co-pays or other financial incentives if they see physicians determined to be cost efficient and high quality. The insurer deemed about one in four physicians in St. Louis worthy of "performance" status.

But to Dr. Elbendary, president of the St. Louis Metropolitan Medical Society, and other area physicians, there was nothing worthy about United's standards. The insurer's evaluation, he decided, was technically flawed, unfair to doctors, disruptive to patient-physician relationships, and more about saving the insurer money than promoting best practices. Physicians were rated on quality based on two- and three-year-old information from claims files. United's Web site notes that pediatricians, dermatologists, gastroenterologists, urologists, otolaryngologists and physicians in eight other specialties could not be adequately rated for quality -- so the sole factor was cost.

On Feb. 17, a letter -- signed by the American Medical Association, the Missouri State Medical Assn., the St. Louis Metropolitan Medical Society and the St. Charles-Lincoln County (Mo.) Medical Society -- implored United and one of its clients, General Motors, to drop the UnitedHealth Performance plan.

"When doctors look at the details of this program, they realize the quality aspect is a sham," Dr. Elbendary said in an interview. "We're not supporting the program. We're not approving of the program."

The pressure got an almost immediate response. United, which would not comment for this story, in a letter told physicians it would try to work more closely with them to develop standards for the program, better educate patients on its limitations, help physicians understand why they were assigned a "performance" rating or not. The plan said it might give doctors a star if they can prove their clinical performances are better than what data seem to indicate.

Still, with pressure from corporate payers to find ways to reduce the cost of health care, experts expect tiered network plans to grow, not recede. The fights may have only just begun.

"I think [tiered networks] will be implemented more frequently," said Arnold Milstein, MD, medical director of the Pacific Business Group on Health and chief physician of Mercer Human Resource Consulting, and a defender of the approach.

The growth of tiered networks

In the last three years, plans such as PacifiCare, Premera Blue Cross and Aetna have begun introducing tiered networks to physicians. In each case, physicians criticized the plans for an overreliance on cost data and faulty quality data. The plans have defended their quality data as accurate, and they make no bones about their willingness to use cost data to appeal to employers wanting to clamp down on escalating health costs.

But until United's new plan, there had been no major insurer that had included primary care physicians outside of a large IPA or multispecialty group as part of its tiered network. Aetna "was very deliberate in not including primary care specialties" in Aexcel to lessen interference with continuity of care, said Don Liss, MD, an Aetna regional medical director who developed the tiered product.

United didn't seek physicians' approval before UnitedHealth Performance was rolled out to 14 states in January. Physicians say they had little advance news of it and no input.

United posted the information on its Web site before it had signed any employer up for UnitedHealth Performance with the hope that some members would be swayed by the stars, even with no financial incentive to choose those physicians. Early this year, however, GM and UPS signed on as active pilot participants.

A United Web page for patients tells members that by following the recommendations of the new program, "you can rest easy knowing that you are receiving care from a physician whose practice patterns are in line with evidence-based medical standards." United does not call its plan a "tiered network."

St. Louis blues

In St. Louis, few were resting easy. Not patients: Gary Style, president of United Auto Workers Local 2250 representing GM employees at a Wentzville, Mo., plant, said he was getting complaints from union members about being steered away from their longtime primary care physicians.

And not doctors: Jim H. Petersen, MD, a gastroenterologist in Chesterfield, Mo., learned he hadn't been rated as a "performance" doctor because his efficiency was too low. Dr. Petersen, president of the St. Charles-Lincoln County Medical Society, questioned United and was told he billed the insurer for $375,000 for 279 patient encounters the previous year, but needed to bill for no more than $373,400 to be considered efficient.

And employers aren't completely resting easy, either: Dale Whitney, corporate health and welfare manager for UPS, initially told AMNews that he was not aware that many classes of specialists were being evaluated only on cost. But on Feb. 23, he told AMNews that a United medical director had told him that all specialties would be evaluated on quality as well, although United's Web site has not been updated to reflect such changes.

An expert on medical quality measurement said valid evaluations would need to focus on quality of care as measured by a case-by-case peer review of doctors' performance, rather than relying on claims data.

"[Economic] credentialing is inherently unethical," said Paul Bronston, MD, chair of the Washington-based American College of Medical Quality. "I see no program that can be fair to doctors if they're not judging doctors on standard of care."

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Scrutinizing doctors: United's new move

What is it? A quality and efficiency measurement that designates a minority of UnitedHealthcare physicians as "performance" doctors based on claims data.

What's at stake for patients? Benefit enhancements, so far being offered by General Motors and UPS for certain PPO and POS plans in 14 states.*

When did it begin? Analysis of claims data took place last year; GM and UPS came aboard, and ratings went online in January.

Are there incentives for physicians? No. Pay-for-performance is not associated with the program.

Is it voluntary? No. As the program rolls out to new markets in more states, United is rating all network physicians.

*Although officially only employees in these states were eligible for enhanced benefits for choosing certain doctors, at press time the United Web site showed 39 states where at least some doctors already had been assigned ratings of "performance" physicians.

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Physician groups voice objections

"The UnitedHealth Performance program is disguised as a Pay for Performance (PFP) program, which, instead of rewarding physicians for providing quality care, punishes patients for seeing any physician who does not provide the lowest average cost. It should be noted that these costs are not merely for services provided directly by the treating physician, but these costs include all services received in the treatment regimen such as hospital, diagnostic testing, and other physician costs, although the primary physician has no control over the charges for these additional services."

Feb. 17 letter to UnitedHealthcare and General Motors from the AMA, the Missouri State Medical Assn., the St. Louis Metropolitan Medical Society and the St. Charles-Lincoln County (Mo.) Medical Society. United responded by offering to involve physicians more in developing standards for the program.

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