Harvard Pilgrim offers cash to patients for using cheaper facilities

Harvard Pilgrim Health Care, a Wellesley, Mass.-based plan, announced it will begin paying members to choose the least expensive available facilities for diagnostic testing. Harvard Pilgrim members can make from $10 to $75, depending on how much their employer pays and what test is performed.

Harvard Pilgrim has more than 1 million members in Maine, Massachusetts and New Hampshire.

The Harvard Pilgrim program, SaveOn, was available as of Jan. 1 to nearly 5,200 members and their families in New Hampshire. Harvard Pilgrim is contracting with a third-party vendor, Tandem Care of Manchester, N.H., to administer the program.

The SaveOn program is similar to SmartShopper, a program that WellPoint subsidiary Anthem piloted in New Hampshire and expanded in the fall of 2011 to make available to employers in Connecticut and Indiana. Anthem used a different vendor, Compass Healthcare Advisors of Bedford, N.H., to administer the program.

Under both programs, a patient whose physician orders a diagnostic test can earn cash payments by selecting what the health plan deems a "cost-effective" facility. The programs are voluntary.

Under the arrangements, when a patient has a physician's order for testing in hand, he or she may call a toll-free number to check whether a lower-cost facility is available as an alternative. If there is one and the patient accepts it, he or she gets a check in the mail when the claim is paid.

When Anthem announced that it will expand its SmartShopper program in October 2011, physicians in Connecticut and New Hampshire said they were concerned about the potential for patients to be steered to lower-quality facilities out of concern for cost alone. Scott Colby, executive vice president of the New Hampshire Medical Society, said that concern hasn't changed.

"We recognize there are entrepreneurs who are trying to employ unique measures to control costs in this marketplace, and perhaps one of the reasons this is a breeding ground is because New Hampshire is a relatively small, tight-knit community, so the ability to impact change through this market is greater than it is in others," he said.

Rick Weisblatt, senior vice president at Harvard Pilgrim's provider network and product development, said the company's aim is to make members aware of cost differences among facilities.

If a member calls to check whether a less expensive facility is available, a nurse calls the physician's office to get permission to change facilities. If the physician says no, "that's where it stops," Weisblatt said. "We're not going to overrule a physician's judgment."