Texas Medical Association Testimony to Senate State Affairs Committee
May 21, 2008
Presented by: Charlotte Smith, MD
Texas Medical Association
Good morning. My name is Dr. Charlotte Smith. I am a physical medicine and rehabilitation physician from Austin. On behalf of the Texas Medical Association and more than 43,000 physicians and medical student members, I would like to thank the chair and the committee for the opportunity to testify on interim Charge No. 1 as it relates to physician rating and classification programs used by health plans and insurers.
A year ago - on April 30 to be exact - I provided testimony to this committee on this very issue. At that time, I shared my personal experience. I, like many of my colleagues, received a poor rating by Blue Cross and Blue Shields' BlueCompare program. My poor rating was based neither on the quality of my work nor on how my patients did under my care. Like many of my colleagues, I fell victim to erroneous data used by Blue Cross. In fact, I received a poor rating based on a sample of patients that I did not even treat, and in some cases, were never even patients of mine.
I wish I could stand before you today and say that Blue Cross and other health plans have dramatically improved their physician profiling programs. However, the truth is these rating programs have not improved. In fact, almost every single major health plan is using this deceptive business practice today. And, patients and employers suffer for it.
TMA appreciates that employers and patients want an easier way to navigate the health insurance purchasing process. We appreciate the fact that employers and patients want more transparency and accountability from health plans. They want to know what they're getting for their health insurance premium dollars. We want the same. However, TMA does not believe that ranking physicians based on inaccurate data, and solely on cost, helps employers and our patients make good health care decisions in today's marketplace. In fact, these systems confuse and mislead employers and patients.
The Problem
Serious Problems Exist With Current Profiling Programs
TMA has long-standing policy opposing financially based ranking programs used by health plans to rate physicians or tier physician networks. Today, TMA still opposes this business practice for these reasons:
- Rating Data Are Seriously Flawed
Texas physicians have offered repeated examples of how the data from claims-based systems are flawed, and how the "assignment" of costs and "affordability" of a given physician are arbitrary. According to a study published in Inquiry (Volume 41, Summer 2004), titled "Comparing Accuracy of Risk-Adjustment Methodologies Used in Economic Profiling of Physicians," these systems cannot reliably assign costs to a given physician. Although physicians have pointed out time and again that the data used by health plans are seriously flawed and inaccurate, health plans continue to ask patients to make health care decisions using a ranking system based on bad data. This is wrong.
TMA collects complaints from physicians each time Blue Cross sends out letters informing physicians of their ranking. The most recent letters went out in March. More than two-thirds of the complaints TMA has collected since mid-March specifically claim that data used for the physicians' ranking were inaccurate. The other third expressed inaccuracies with attribution of patient cost and demographic information.A copy of this report is in your packet as well as a summary sheet about the types of complaints.
Health plans continue to post physician rankings publicly, even when the physicians notify them right away that their data are error-ridden. The health plans promote this ranking effort as a way for employers and patients to identify physicians who provide high-quality care for less out-of-pocket costs. Plans, when challenged, have not been able to demonstrate that the rating systems are reliable, or that they point patients toward physicians who deliver higher quality care at lower cost. This marketing practice is, at best, misleading and deceptive, and at worst, fraudulent.
- Physicians and Patients Are Misled/Deceived About the Rating Systems
Health plans market their tiered networks to employers and patients as quality enhancements. Employers and patients are left with the mistaken impression that preferred tiers provide better quality care.
The criteria used by health plans so far have been based solely on claims data. Quality of care and better patient outcomes are not part of the analysis. For quality to be part of the rating equation, the health plans would have to validate their patient sample by reviewing actual patient charts. Then they would need to provide the tools necessary for the physician to improve outcomes in the future. Neither of these activities are part of the process today.
- Physicians Receive Economic Incentive to Limit Care
These ranking programs provide a perverse incentive for physicians to undertreat patients or to limit medically necessary care. Physicians will become reluctant to treat or accept patients with complex conditions that are expensive to treat. Allowing only physicians who meet lower-cost criteria to participate in "a preferred tier" within existing networks is not quality or efficient care. Instead, it places the sole burden on physicians to constrain costs. Simply, tiered networks and economic ratings give physicians incentives to limit care if they want to achieve a so-called "quality" rating.
- Most Plans Violate Right for Due Process
Most health plans do not inform physicians of their right to protect their reputations when a process to challenge a rating is available. Moreover, if the health plan does offer an appeal process, it often is so complex and arduous that it is impossible to navigate. In your packet you will find the BlueChoice Solutions appeal process. The flow chart, which outlines the steps needed to appeal, is more than four pages long. Many times, like in my case, physicians are simply trying to correct errors and salvage their reputation. Imagine having to do this for several major payers in the market where you are practicing.
- Rating Systems Violate Texas Code
When health plans place physicians in an "exclusive tier" or give a rating of "efficient" or "affordable," this implies more patients will be directed to these physicians because of their rating. The preferred-tier physicians also receive more favorable advertising. The possible opportunity for seeing more patients and receiving payment for the services provided to tiered patients is an indirect benefit of a favorable health plan rating. You permit health plans to direct patients to preferred physicians through an offer of a different level of coverage. You allow health plans to print physician directories. However, have you placed in law the ability for a health plan to "defame" a physician based on cost? No. Where have you authorized health plans to direct patients to physicians in this manner? You have not, but health plans do it anyway.
The Solution
TMA put together a Select Committee on Physician Performance to evaluate the BlueCompare program in 2006. The committee developed a comprehensive set of recommendations for Blue Cross to consider if it was going to move forward with a physician-profiling program. TMA's framework, if used appropriately, would make physician-ranking programs more reasonable, honest, and transparent to patients, employers, and physicians. TMA strongly believes that if health plans use the steps outlined, they could significantly improve their ranking programs in the future. We have shared this framework with Blue Cross and UnitedHealthcare.
TMA's Framework for Evaluation of Physician Performance Rating Programs
- Is the health insurance company willing to appoint an expert team of TMA members to review clinical measures and provide input on the rating program and physician communications?
- Has the performance rating methodology been externally and objectively validated?
- Is there an option to pilot test the program in a selected market to evaluate results and make modifications as appropriate?
- Is there an "opt out" option for physicians who do not wish to participate in the rating program?
- To assure transparency, can physicians obtain the data on which they are rated?
- Will there be a robust, timely review and appeals process?
- Can patients understand the materials written for them? That is, are those materials written at an eighth-grade level or lower?
- Will rating metrics be updated in a timely fashion before being made available to the public (i.e., changes in star, ribbon, and other icons on the plan Web site)?
TMA recently appointed an ad hoc committee to analyze the details of the BlueChoice Solutions/Risk-Adjusted Cost Index (RACI) that is currently used to rank physicians. TMA strongly believes that any ranking system used by any health plan must, at the very least, include these three factors:
- First, health plans must tell physicians, in advance, what criteria they will use to evaluate the physician's performance and ranking. Otherwise, it's like giving a final exam to a student on the first day of class.
- Second, physicians must have the opportunity to review their data and ranking before the health plan makes the ranking public. Many TMA physicians have identified inaccuracies and outright errors with the data used in the BlueCompare program. Unfortunately, few have been successful in having their ranking changed or removed.
- Third, it is critical that an appeals process allow physicians to correct any misleading or wrong data - especially if it is expected that patients will rely on this data to make important health care decisions. If this does not occur, patients are getting wrong information based on bad data.
In closing, Mr. Chair and committee members, I will say the health insurance companies are selling their customers and our patients a pig in a poke. The mistakes in their data … and the mistakes in how they use their data … have led them to build fatally flawed rating systems that mislead rather than inform. You may have heard that as a result of New York's lawsuit regarding physician ranking programs, reforms are slated for the marketplace - a framework that was embraced by the health plans to audit and monitor their ranking programs and to ensure greater transparency. An outside entity, National Committee of Quality Assurance (NCQA), is supposed to ensure health plans are compliant within this framework. However, no action has been taken to put this framework into practice at this time. In fact, health plans were given a grace period by NCQA, which has no deadline for compliance. In essence, this action is just lip service and does not institute any accountability in the marketplace in the near future; it allows health plans to continue with their existing ranking methods indefinitely.
I also want to reiterate that low-cost care is not necessarily effective care. If proper patient safeguards are not put in place, physician rating programs and tiered networks can encourage underutilization and undertreatment. By allowing only physicians who meet lower cost criteria to participate in these "preferred networks," the sole burden of constraining costs is placed on physicians. To help constrain health care inflation, all entities in the health care system must be accountable .
On behalf of the Texas Medical Association and myself, thank you again, Mr. Chair and committee members, for the opportunity to testify on this very important issue.
Transparency and Efficiency: Keys to Controlling Health Care Cost
Susanne Madden, CEO of the Verden Group presented a compelling testimony to the Senate State Affairs Committee. She built a strong case on why greater transparency and accountability is needed in today's health insurance market place. Susan Madden's testimony: Transparency and Efficieny: Keys to Controlling Health Care Cost (PDF)