Insurers reach accord on P4P principles; standards still to be worked out

Pressure from employers and the fear of more regulation is pushing plans away from cost-based measures.

By Emily Berry — Posted April 21, 2008

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Many of the country's largest health plans have agreed on a set of standards to be used nationwide as the basis for physician pay-for-performance initiatives and tiered networks. Underlying the effort is insurers' fears that states could develop 50 different sets of regulations to govern these programs -- a concern sparked by last year's crackdown by New York's attorney general.

Though implementation is at least nine months away, supporters said the agreement, announced April 1 by an organization called the Consumer-Purchaser Disclosure Project, could mean consistent rating systems and quality measurement that more closely lives up to its name.

"While there have been problems with methodology in the past, we think this goes a long way to try to resolve some of those, in particular that physician report cards will not be based on cost alone," said AMA President-elect Nancy H. Nielsen, MD, PhD, an internist in Buffalo, N.Y.

Plans such as WellPoint, UnitedHealth Group, Cigna and Aetna signed the agreement, called the Patient Charter for Physician Performance Measurement, Reporting and Tiering Programs. The project behind the charter is made up of large employer coalitions that study and act as advocates on health care issues.

Under the agreement, health plans have three months to hire an organization, such as the National Committee for Quality Assurance, to audit pay-for-performance and tiering programs to ensure the plans use valid measures to rate doctors. Insurers then have another six months to have the audit completed. The plans also must work toward coordination and aggregation of their data.

Unlike an agreement numerous health plans signed after being put on notice by New York Attorney General Andrew Cuomo, this charter will not impose penalties on insurers that fail to follow through.

But health plans are accountable to their big-business customers, who pushed for the charter. Employers who support it have agreed to make compliance a part of their health plan contracts, said Peter V. Lee, co-chair of the project and executive director for national policy for the Pacific Business Group on Health.

"I have great faith that the employers and consumers that promulgated this are going to advance this as hard as they can so all health plans, national or local, will adopt these criteria," said Doug Henley, MD, executive vice president and CEO of the American Academy of Family Physicians.

Lee said Cuomo's action served as a catalyst for the agreement by underscoring the possibility that every state could set up different regulations for health plans' physician-performance measurement.

"We had a meeting with the health plans and associations, saying, 'We recognize this is a big hurdle we're asking you to take. How high can we get you to jump?' " Lee said.

Aetna spokeswoman Karin Rush-Monroe said that while the New York deal applies only in that state, Aetna and other insurers pledged they would move toward applying the same principles in other states.

With its nationwide scope, "the Patient Charter provides a framework that addresses the most critical aspects of physician performance measurement programs without having 50 separate regulatory or legal systems put in place," Rush-Monroe wrote in an e-mail.

Health plans will be able to choose which measures they use to grade doctors, but the agreement sets up a hierarchy, starting with measures endorsed by the National Quality Forum, of which the AMA is a member.

Many of the measures developed by the Physician Consortium for Performance Improvement, a group of specialty and state societies convened by the AMA, are on the NQF list.

The charter also calls for health plans to:

  • Use measures that are "meaningful to consumers and reflect a diverse array of physician clinical activities."
  • Ensure the involvement of the physicians and others being measured by allowing for their feedback in designing programs, giving them notice of measurement and providing an opportunity to correct data or appeal rankings.
  • Use transparent and valid measures and methodology; specifically aggregating data whenever possible, and adjusting for risk and severity.

"We can't move to a value-based system unless the clinicians who are being evaluated have confidence in the evaluations," said Karen Ignagni, president and CEO of trade group America's Health Insurance Plans.

Using good clinical measures -- not cost alone -- to measure doctors is a vital part of getting to that point, Dr. Nielsen said. "It's not enough just to be transparent. You can be transparent and have crummy methodology ... it has to be valid and reliable."

Cigna Chief Medical Officer Jeffrey Kang, MD, MPH, said plans likely will not move ahead at the same pace.

"The fact that we're endorsing the patient charter means we're supportive, but I think, for most health plans, it still doesn't mean they've committed on a time frame to get there," he said.

Dr. Kang said Cigna has hired the National Committee for Quality Assurance to act as a ratings examiner of its program under the Cuomo agreement and expects that review to be completed by the end of May. This puts Cigna well on its way to fulfilling the terms of the new charter, he said.

Lee said the support of many physician associations came with a caveat. "They said, 'We don't necessarily think health plans should be in the business of measuring physicians. But if they are, do this right.' "

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