Opinion

Reining in rankings for tiered and narrow networks

Organized medicine has joined lawsuits to nip bad performance measurement programs in the bud. And in New York, the state attorney general has warned several insurers about their programs.

Posted Sept. 17, 2007.

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Just as the 1980s' Transformers and Teenage Mutant Ninja Turtles have made a comeback this summer, so has another fanciful corporate brainchild from that time: the tiered physician network.

But while the first two are harmless, the networks -- programs in which health plans give their members incentives to use physicians in "cost efficient" tiers and to avoid physicians identified as "cost inefficient" -- raise issues concerning disruption of care.

A big red flag has to do with the role of cost, which has been there since the beginning. In the '80s, PacifiCare Health Systems implemented a two-tiered hospital network that factored in hospital charges. In 2002, the insurer replaced it with a "narrow network" -- a program offering members care from only a select group of doctors and hospitals -- and added a quality component.

The idea took off from there. Now, Aetna, Cigna, and UnitedHealthcare are among the insurers exploring tiered network systems.

The cost-cutting appeal to health plans is obvious, and the networks may also be an easy sell to unsuspecting patients looking for a price break. But a June report from the American Medical Association outlined the problems that can arise from the tiered or narrow-network model: Patients lose access to physicians not in the network, causing irrevocable damage to physician-patient relationships. Primary care physicians have a hard time referring patients to specialists they trust because those physicians may not be in the network.

And the systems can be unfair in their rankings. Even if the data used to rank doctors were perfect, random effects over time decrease their precision. The AMA report noted that numerous factors can skew the data. For example, some physicians may have an unusual cluster of patients because they are known in their community as the physician of "last resort" for patients with difficult-to-treat diagnoses. Other doctors may treat a high proportion of socially or economically disadvantaged patients. The end result is that doctors may be discouraged from accepting these patients because they fear being eliminated from the network.

On top of that, physicians and patients have seen little transparency in the methods insurers use to determine how a physician is ranked, or why they may be in a narrow network.

Doctors are so concerned that delegates to the AMA Annual Meeting in June adopted policy to strongly oppose networks that deny patient access to, or attempt to steer patients towards, certain physicians primarily based on cost factors.

Physicians, the AMA and others are fighting back against problems they see. In 2005, the AMA worked with state and local medical societies in St. Louis and Shreveport, La., to stop United from continuing its "Performance" program that excluded 70% to 75% of participating physicians. In late July, the Fairfield County (Conn.) Medical Assn. and nine physicians sued Cigna and UnitedHealth Group over their programs. Physicians say the quality assessments are random and based solely on a tiny sample of claims data that is often inaccurate.

Also this summer, New York Attorney General Andrew M. Cuomo sent letters to Aetna and Cigna warning them that their physician ranking programs are likely to confuse or deceive consumers. Earlier this summer, Cuomo warned UnitedHealthcare not to introduce its physician ranking program in New York without his prior approval.

And in early August there was a promising settlement in Washington state, promoting cooperation between the state medical society and an insurance company. It stemmed from a lawsuit the Washington State Medical Assn., the AMA/State Medical Societies Litigation Center and six physicians filed against Regence BlueShield's "Select Network."

Among other things, Regence agreed to let the WSMA review the performance measurement program before it is implemented; give the medical society at least 10 days notice before releasing new physician performance scores and make reasonable efforts to let doctors know the scores are coming; post on its Web site an explanation of the methodology and data used to calculate scores; and let physicians appeal their scores.

There is nothing inherently wrong with trying to identify physicians who deliver high-quality, effective and appropriate health care in a cost-effective manner. But networks that deny patient access to, or attempt to steer patients towards, certain physicians primarily based on cost-of-care factors need to go the way of the 1980s' launch of New Coke -- kaput.

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