California physicians sue over quality ratings

What started as a collaboration on physician quality reporting in California by insurers, businesses and physicians has turned into a feud that has gone to court.

The California Medical Assn. and two physicians filed a class-action lawsuit against Blue Shield of California on Sept. 9, asking the court to block the insurer from using its Blue Ribbon program to distinguish physicians the insurer deems to be high-quality.

The lawsuit is the most recent complaint organized medicine has made about health insurers' quality and cost rating, tiering and quality designation programs. Published studies have shown that research has supported physicians' assertions that these programs are inaccurate and potentially misleading, though the plans say they are based on firm, solid evidence.

The CMA says the Blue Ribbon program, which premiered June 1, is based on faulty data and doesn't accurately represent the quality of physicians' care.

"While Blue Shield of California has touted its Blue Ribbon Recognition Program as identifying physicians in California supposedly providing superior medical care to Blue Shield of California enrollees, in reality, it is an economic profiling scheme that inaccurately and unfairly rates [physicians] through the use of inherently flawed methodology," the lawsuit says.

Blue Shield and the coalition that developed the data underlying the Blue Ribbon program defended it, saying it was not based on cost or meant to penalize anyone, but rather to reward high-performing doctors.

The claims data and methodology Blue Shield used -- the California Physician Performance Initiative -- was developed by the California Cooperative Healthcare Reporting Initiative, a coalition of businesses, insurers and physicians. The CMA withdrew from the CPPI project in April, objecting to the data and methods used to deem physicians as high-performing.

The lawsuit was filed in Alameda County Superior Court. Blue Shield did not immediately file an official legal response, but issued a news release that said the plan was "disappointed" that the CMA sued instead of continuing to work with insurers and business to improve the program.

CCHRI Executive Committee Chair David Hopkins, PhD, said the Blue Ribbon program was launched after multiple attempts to use insurers' claims data to find meaningful, accurate quality measures.

"Each time we did it, we learned something and tried to make it better," he said. "We determined the information was good enough for limited purposes, and one was recognizing high-performance physicians."

But the CMA's lawsuit said the data aren't reliable even for that limited use, and that the Blue Ribbon designation will inevitably make physicians who don't qualify for a ribbon next to their names appear subpar.

Among other complaints, the lawsuit said Blue Shield does not offer a thorough disclaimer explaining the basis for its Blue Ribbon designation, or explain that only certain specialties are eligible for the program.

The types of complaints laid out in the CMA's lawsuit are familiar ones from organized medicine. The American Medical Association and other groups of physicians have called on health plans to shut down profiling programs that are based on incomplete data, pure cost profiling or faulty analysis.

Major insurers in New York were forced to change or shut down tiering programs that the state attorney general's office found were presented as quality-based but were actually produced with cost data alone.

Recent research has shown ratings programs to be inaccurate and potentially misleading: The RAND Corp. published multiple studies this year that point to the potential for physicians to be misclassified by insurers' cost-profiling programs.

The first one, published in March, was based on a tiering program similar to ones Massachusetts insurers use. Health plans there are required to tier physicians if they want to cover state and municipal employees who are part of the Massachusetts Group Insurance Commission. The Massachusetts Medical Society has sued the state over the program, and the lawsuit is pending.

The AMA and state medical societies, including California, have called for insurers to publicly document the accuracy of their physician cost profiling.

Insurers, which have generally defended quality ratings as imperfect but better than nothing, said they want to work with physicians to improve rating programs.

In April 2008, Blue Shield was among the health plans that signed on to a Patient Charter for Physician Performance Measurement, Reporting and Tiering, drafted by the Consumer-Purchaser Disclosure Project, a group of businesses and consumers who advocate for transparency and meaningful quality information. The insurers pledged to use agreed-upon, evidence-based standard quality measures rather than cost data to rate physicians.

As of August, Blue Shield was under evaluation by the National Committee for Quality Assurance, which is charged with certifying fulfillment of the agreement.