Colorado adopts doctor rating standards, health system reforms

Several bills signed into law in June followed a state blue ribbon commission's recommendations.

By — Posted July 7, 2008

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New laws in Colorado will enable physicians to review and contest health plan rating systems, patients to have standardized and possibly electronic health plan IDs, and insurance companies to develop new types of plans that the state may help consumers purchase.

Colorado Gov. Bill Ritter Jr. on June 3 signed into law a host of health care bills. Colorado Medical Society spokeswoman Edie Sonn said the measure regulating physician ratings could be a national trendsetter. It was influenced by a model developed by New York Attorney General Andrew Cuomo.

The measure requires health plans to make transparent their systems for profiling, rating or otherwise characterizing physicians, said Dave Downs, MD, the medical society's president. "The law basically says that if that data is publicly reported, they need to demonstrate its validity and accuracy of attribution." It also gives physicians a chance to appeal the ratings.

Jeremy A. Lazarus, MD, speaker of the AMA House of Delegates, said, "The work of the Colorado Medical Society will help create a much fairer environment for physicians to practice medicine in, and shows that with the concerted action of physicians working together, we can achieve our goals."

The law arose from discussions between insurers and physicians in an advisory council assembled when UnitedHealth Group and PacifiCare Health Services Inc. merged in 2006. Michael Huotari, executive director of the Colorado Assn. of Health Plans, said the talks that led to the law were relatively harmonious.

"We realized that we had some fundamental agreements, surprisingly, about how this should be done in terms of principles and concepts," he said. These include using statistically valid numbers and giving physicians prior notice of the ratings and a chance to correct and appeal them.

Ritter also signed several other bills on June 3. They expand access to Colorado's State Children's Health Insurance Program and direct the Division of Insurance to create a shopping guide for private health insurance on its Web site.

Also, the fiscal 2009 budget will increase Medicaid reimbursement for physician evaluation and management codes from about 68% of Medicare to 90% of Medicare at a cost of $29 million. Hospitals will see a 1.5% Medicaid reimbursement boost estimated to cost $4.4 million.

Another new law will mean that health plans' ID cards soon will carry the same basic information and in a few years could be a tool to improve health care efficiency and quality, Huotari said.

The law first requires health plans to adopt standardized ID cards that indicate the subscriber's co-payment and deductible amounts, among other information, by July 1, 2010. The law also creates a stakeholder work group to decide what additional information -- such as coverage limits -- health plan IDs should contain and what form the IDs should take. A credit card-style ID that can be swiped is one possibility.

The work group, which will include physicians, is expected to finish its recommendations no later than mid-2009, according to the law's provisions, with a goal of implementation two years later.

The panel is expected to seek advice from the Workgroup for Electronic Data Interchange, of which the AMA is a member. Health plans have anticipated this advance in technology and support the law, Huotari said. The Colorado Medical Society also supports the law.

Should electronic IDs become reality, Dr. Downs doesn't expect the measure to lead to major equipment or software purchases for physician practices. A typical credit-card style reader costs about $100, Sonn said.

Electronic IDs present the opportunity to reduce medical errors if they allow physicians to access a patient's medical history quickly, said Rep. Anne McGihon, chair of the Colorado House Health and Human Services Committee. "You're not going to have to run the same test again, but you're going to immediately know what that person had," she said.

Setting up a mandate?

Some of the legislation followed recommendations of the Blue Ribbon Commission for Healthcare Reform, a panel created in 2006 by the General Assembly. The commission's ideas focused on expanding health care access to the state's roughly 800,000 uninsured, while maintaining choice, reducing health care costs and improving quality.

Richard Haugh, spokesman for the Colorado Hospital Assn., said the panel set the tone for the 2008 legislative session.

"[The commission] probably did a lot to foster an atmosphere of collaboration. I expect to see that going forward, too," he said.

One of the new laws requires insurance companies to work with two state agencies to design "Centennial Care Choices," a program geared toward the uninsured in which private health plans could provide basic coverage. This follows a Blue Ribbon Commission recommendation to establish a minimum-benefit health plan with a target premium of $200 a month for an individual. The proposal is part of a commission recommendation to establish an individual insurance mandate in Colorado.

The Centennial Choices law requires the new plans to include primary and preventive coverage, offer incentives for healthy behaviors and use pay-for-performance programs where appropriate. But it was written with controlling costs in mind.

"It kind of turns the usual process on its head," Huotari said. Plans will determine how much it costs to offer certain benefits and work with state agencies to design the plans. The hope is that it will be flexible enough to allow insurance companies to innovate, Huotari said.

The Colorado Medical Society and the hospital association both support the Centennial Care Choices law. "In general, it's a great stepping stone toward health care reform," Haugh said.

The medical society also supports requiring people to have health insurance but doesn't have an official position on how a mandate should be structured. "We're very agnostic on the way you get there," Dr. Downs said.

McGihon said the key to adopting an individual mandate is making sure it's part of a comprehensive plan to advance health care access.

Any significant expansion of access to health care or insurance will require more public funds, which under Colorado's strict constitution means asking voters for approval, McGihon said.

Still, she was optimistic about the state's chances of covering more of its residents. "You should keep your eye on Colorado. We are just starting down the road to comprehensive health care reform."

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Colorado reforms

Colorado's Democratic Gov. Bill Ritter on June 3 signed several key health system reform measures. The laws:

  • Require health plans that post physician quality data, cost information or other measurements to include a statistical analysis accounting for patient populations and case mixes, describe the methodology used, and give physicians an opportunity to review and appeal the findings.
  • Increase Medicaid physician pay for evaluation and management codes from about 68% of Medicare to 90% of Medicare.
  • Require insurers to offer standard health plan cards in 2010, including the enrollee's name, common co-pays and deductibles, and plan administrator contact information. A work group will develop other standards with the long-term goal of electronically transmitting coverage and eligibility data, and other information.
  • Expand eligibility for the Colorado State Children's Health Insurance program by 20% to reach 225% of the federal poverty level ($39,600 for a family of three). The laws ease the enrollment and income verification processes. An additional 55,000 children are expected to gain coverage.
  • Begin to develop standards for basic, individual market health coverage to be offered by private insurers. The plan is to provide primary and preventive care, offer incentives for healthy behavior, and encourage the use of health IT and a pay-for-performance system.

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External links

Final report of Colorado's Blue Ribbon Commission for Health Care Reform, January (link)

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