WellPoint offers members cash incentives for using less expensive facilities

WellPoint is expanding a program that rewards members with cash refunds when they get tests and procedures done in what the company deems to be cost-effective settings.

The SmartShopper program, piloted in New Hampshire in 2010, is expanding this fall to include two employers in Connecticut and another two in Indiana. Bedford, N.H.-based Compass Healthcare Advisors, which administers the program for WellPoint, also said it is recruiting potential clients in Kentucky.

In the program, used by self-insured employers whose plans are administered by WellPoint companies, after a physician recommends a test or procedure, a member calls a toll-free number or goes online to compare prices at nearby facilities. The rebates are available for tests such as MRIs and CT scans, and procedures such as bunion removal and spinal fusion.

If members choose the more "cost-effective" location, as defined by the SmartShopper program, they would get a check in the mail based on a percentage of savings. The rebate is not dependent on which physician performs a procedure, only the facility. The program is voluntary, and enrollees' health information is kept confidential from their employers. The rebates are paid out of a pool of money set aside by employers.

"We always encourage our members to have a conversation with their physician," said Compass spokeswoman Nicole Vailas. "Especially with some surgical procedures, their physician may have admitting privileges with multiple hospitals or surgery centers, so you don't have to change your doctor or anything about the procedure."

Vailas said that, as of mid-October, the company has more than 60,000 members enrolled, including about 22,000 employees of the State of New Hampshire and their dependents.

Scott Colby, executive vice president of the New Hampshire Medical Society, said relying on cost alone to direct patients is problematic.

"The New Hampshire Medical Society has concerns with programs that rely solely on economic credentialing as vehicles to steer clinical volume," he said in a statement. "We recognize that the popularity of such programs is increasing; however, quality must always be considered if such incentives are to be used."

WellPoint pitches the program as a way to promote awareness of cost differences among health care facilities, reward employees and "drive engagement."

"When consumers are empowered with transparent information, they make decisions about their care that is appropriate for them and that have the potential to reduce costs," Paul Bartosic, director of sales at WellPoint subsidiary Anthem Blue Cross and Blue Shield of Connecticut, said in a statement. "It's our responsibility to empower our members to make informed decisions."

Matthew Katz, executive vice president and CEO of the Connecticut State Medical Society, said what WellPoint is selling as transparency is not useful to patients, because it gives them only cost comparisons and no information about the quality of the care at a given facility.

"They're not a 'smart shopper.' They are, quite frankly, a dumb shopper if all they're being provided with is a dollar figure," he said.

Katz said the program could end up costing both employers and patients money in the long run. For example, if a test is done at a facility that is cheaper because it uses older equipment, the physician may have to order another test to get a better reading. Or if a less expensive facility has lower quality care, it could mean a longer recovery time, lost work time and higher medical bills later, he said.

"Employers are concerned about cost and are trying to latch on to something they hope will reduce the costs, but all this is doing is shifting the costs," he said.

But Vailas said Compass isn't sending patients to low-quality facilities. Every facility is screened as part of Anthem's network, she said. "All the locations we list are considered high quality. The last thing we want is for people to equate 'cost-effective' with 'cheap.' "