Delegates rally against unjust health plan conduct

The AMA targets code blending, economic profiling and other payer practices it says are unfair.

By Kevin B. O’Reilly — Posted Dec. 4, 2006

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The AMA House of Delegates inveighed against insurer practices it said hurt physicians and patients, such as the blending of evaluation and management payment codes, tiered physician networks, secondary PPO discount markets and economic profiling of doctors.

Unfair insurer practices are happening "across the board," said AMA Trustee Joseph P. Annis, MD. Carriers are "the middle man extracting billions out of the health care system -- money that should be going to take care of patients."

The AMA already has policy opposing insurers' manipulation of CPT coding, but that has not been enough to stop payers from unilaterally blending different coding levels to lower overall reimbursements to physicians. At their Interim Meeting last month, delegates directed the AMA to push for congressional action to make the practice illegal.

Delegates also adopted two resolutions targeting insurers' use of opaque economic data to grade physicians and shift patients toward doctors who provide services at discounted fees. The first, on tiered and narrow physician networks, says payers should "disclose, in plain language, the criteria by which the carrier creates a tiered, narrow or restricted network." Those networks should not be driven inappropriately by economic criteria or limit the number of preferred specialists available to patients in an area, the resolution said.

A second resolution, on economic profiling, said the AMA should oppose insurers' arbitrary use of efficiency measures and attempt to ensure that they adhere to the Association's principles and guidelines on pay-for-performance, adopted in June 2005. Delegates also directed the AMA to explore potential legal action to stop economic profiling.

Dr. Annis said these two resolutions addressed a "huge issue" because "under the guise of quality, insurers are grading physicians on who provides care at the lowest cost, but the lowest cost is not necessarily the best."

In addition, insurers "are silent on what criteria they're using," Dr. Annis said. "It's that same old black box."

Rental network PPOs

Delegates also asked the AMA to investigate the emerging practice of renting preferred provider organization discounts on physician services, often without doctors' knowledge. Referred to as rental network, or silent PPOs, they operate by selling a contracted physician discount to third-party vendors.

This can mean that "your lowest contracted rate will likely be the only one you'll ever be paid," said Catherine Hanson.

The AMA already has model state legislation to regulate the practice, and delegates directed the Association to distribute it broadly.

The house also asked the AMA to educate doctors about silent network PPOs and issue a report at next year's Interim Meeting on the so-called repricers.

"It's time for us to make a change, and we have to do that together," said Jeremy A. Lazarus, MD.

In other action, the AMA will continue to advocate that hospitals adhere to the 11 principles it set out to guide reimbursement agreements with hospital-based physicians.

The Association also reaffirmed that a professional fee should be paid directly to the appropriate physician for clinical laboratory work. It also said it would work to educate doctors about using CPT modifier 26 to bill insurers for their interpretive skills.

And in an effort to aid state medical societies in their efforts to abolish certificate-of-need laws, the AMA will analyze the risks and benefits of CON statutes and their impact on employers and report its findings at the 2007 Annual Meeting in Chicago.

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External links

AMA booklets "Tiered and Narrow Physician Networks," and "Economic Profiling of Physicians,"access restricted to AMA members (link)

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