Right response to wrong incentives

Delegates at the AMA's June Annual Meeting approved a report that recommended giving the Association the authority to "actively oppose" any insurer's incentive program that fails to meet principles the Association developed to ensure that a program is fair to physicians and good for patients.

The AMA already had the authority from the House of Delegates to oppose misguided pay-for-performance, tiered network and physician rating programs, and has done so.

But the change in language signals a more aggressive stance when it comes to plans using cost of care, claims data, or other misleading or unreliable information as a basis for granting incentives to physicians, or publicly rebuking them with lower ratings on Web sites or higher co-pays for patients.

One immediate change in strategy from the delegates' approval is that the AMA will no longer act solely on a state medical society's invitation or permission to get involved in an insurer-physician dispute. For example, if an insurer's program is being introduced in multiple states, and it violates the Association's principles on incentive plans, the AMA can take on the insurer immediately about what the plan is doing in all locations.

These are the principles the AMA demands of any incentive plan: ensure quality of care; foster the patient/physician relationship; offer voluntary physician participation; use accurate data and fair reporting; and provide fair and equitable program incentives.

The principles are consistent with another report the delegates passed during the Annual Meeting that outlines strategies for health cost reduction. These strategies focus on achieving better value for health spending, rather than just a straight-out cost reduction.

During the AMA house debate on the report, some delegates brought up the idea of an outright condemnation of all incentive programs. But others cautioned that in doing so, physicians would lose a seat at the table of any discussions of such programs.

As an example, supporters of the approved recommendations cited pressure from the AMA and others that helped scuttle Medicare reporting and pay-for-performance initiatives that would have given physicians no additional pay, or would have been budget-neutral. Instead, those onerous provisions were replaced by a program that uses new money and incorporates physician-developed quality measures.

In an earlier victory, the AMA and state medical societies secured significant changes to a physician-rating program UnitedHealth Group introduced in Missouri and Louisiana that was criticized for using cost and claims data to identify physicians as "performance" doctors.

Right now, the AMA is examining multiple complaints it has received about private-pay incentive programs, and determining what action to take against those that violate its principles. Many doctors have reported that flawed data are being used to determine incentive bonuses, in a way that appears to give physicians an incentive to avoid unhealthy patients. Physicians also complain of being forced to provide reams of unnecessary paperwork to prove their worth.

In cooperation with state and local medical societies, or in leading a national effort, the AMA intends to take on insurers when they egregiously use incentives not for better, more efficient care, but to bolster their own bottom lines.

These programs don't have to provide the wrong incentives. They could be a force for delivering the best care for the best value. The AMA's recent actions are both a reminder of what constitutes a principled program and of a more aggressive approach in opposing those that are not.