TMA Attacks Health Plan Rankings Based on Inaccurate Data

Testimony House Insurance Committee: House Bill 1888 by Rep. John Davis

Texas Medical Association
March 31, 2009
By: Josie R. Williams, MD, MMM, CPE

Good afternoon. My name is Dr. Josie Williams. I am a gastroenterologist and the president of the Texas Medical Association. Today, I stand before you representing nearly 44,000 physician and medical student members. Currently, I am an associate professor in the Department of Internal Medicine at Texas A&M University Health Science Center College of Medicine, and director of the Rural and Community Health Institute and the Institute for Health Care Evaluation at Texas A&M, where I specialize in quality and patient safety initiatives.

I would like to thank Chairman Smithee and the committee members for the opportunity to testify on House Bill 1888 relating to standards required for certain ranking of physicians by health benefit plans. We want to thank Representative Davis for recognizing two important elements:

  1. The need to hold health plans accountable for the ranking process they use and market to employers, and
  2. The availability of due process, which allows a physician to challenge a health plan's ranking.

However, there are slight differences in what Representative Davis' bill suggests and what TMA feels is needed. These differences will be highlighted later in my testimony.

Background on Current Physician Rankings Systems

Health plans in Texas have created or are creating rating, tiering, and ranking systems that attempt to assess a physician's professional performance against his or her peers or an objective measurement. Currently, the objective measurement and performance standards are not disclosed to the physician prior to the evaluation period, leaving the physician without the ability to modify his or her practice to meet the new standards. The results of the evaluation, which often are imprecise or incorrect, are then made available to the public through a rating or ranking published on a Web site or through the inclusion/exclusion of that physician in a "preferred tier" of the health plan network. The preferred tier to which the physician is assigned also is published.

Physicians' professional reputations can suffer harm when incorrect ratings, rankings, tiering, or comparisons are made public prior to the ability of the physician to challenge the ranking. Patients also are misled because the rankings are portrayed as a "quality" ranking when in actuality, the ranking is a cost-efficiency ranking that is beneficial to the health plan. Patients who rely on incorrect ratings, rankings, or tiering information may have their medical care interrupted if they change their choice of physician based on this erroneous information.

No Formal Due Process to Challenge Health Plan Rankings

Prior to a physician's public ranking, health plans do not offer standard, meaningful methods to challenge the reliability of the ranking. Providing due process allows the physician to protect his or her reputation. Most health plans do not inform physicians of the availability of a process to challenge their rating. Moreover, if the health plan does offer an internal appeals process, often it is one-sided and overseen by the health plan's medical director, and the outcome usually favors the health plan.  

This is why TMA strongly believes that any ranking system used by any health plan should include a basic framework that:

  • Provides that any objective measurements or performance standards be disclosed to the physician prior to the evaluation period.
  • Requires that the data used to establish the ratings or tiering be made available to the affected physician prior to publication .
  • Provides for a due process/fair hearing between the physician and health plan, much like the one proposed in House Bill1888. However, the hearing should be held prior to publication of the physician's ranking or tiering.
  • Requires the health plan to prominently display in its publication a symbol that indicates the physician disputes the rating, tiering, or ranking if the physician and health plan continue to disagree over the rating or tiering decision.

Why It Is Important for Due Process to Occur Prior to Publication of Health Plan Ranking Systems

Many health plans have not instituted any meaningful controls or audit functions to ensure the underlying data utilized are accurate. As with any complex system, data corruption takes place, yet there is no effort to ensure the rating of a physician is accurate.

Health plans base physician ranking systems on cost, using claims data. This information has nothing to do with physician quality. Health plans represent to patients that the ratings systems assess a physician's "quality" of practice and whether the physician is "efficient" or "affordable." These terms are inaccurate and misleading. Health plans do not measure "quality" but merely compare claims data with certain medical interventions they have decided are important. Health plans do not measure efficiency - which would require an evaluation of results. Instead, they assign medical costs incurred by one physician back to the primary care physician. Often, the primary care physician has no knowledge of the patient accessing another physician or hospital and has no control of those costs. Nonetheless, the health plan dings the physician for these costs when determining the tier or rank.

Physicians Aren't Aware of Their Ratings Until They Are Made Public

Physicians are not made aware of the standards against which they are measured until after the tiered network review period. Thus, a physician has no chance to modify his or her practice to conform to the "standards" imposed by the health plan.

Texas physicians have offered repeated examples of how the input data from claims-based systems are flawed, and how the "assignment" of costs to a given physician is arbitrary. Such systems have been studied and reported in peer-reviewed publications, and conclusions have been drawn that these methods cannot reliably and appropriately assign costs to a given physician.

  • Example No. 1: Dr. B reports in a December 2007 letter that when he asked the health plan representative for specific details on patients, dates of service, and codes used to establish the insurance carrier rating, he was informed the information was not available and could not be obtained.
  • Example No. 2: Dr. S, like many of her colleagues, received a poor rating based on a sample of patients that she did not even treat, or in some cases, were never patients in her practice.

In fact, TMA collects complaints such as those above from physicians each time a health plan publishes its physician rankings. More than 50 complaints were received for one health plan alone on the inaccuracies of the patient sample used to apply the physician rank.

In spite of this lack of validation, health plans are marketing these rating systems to employers and the general public as a way to identify physicians who provide high-quality care cheaply. Health plans also continue to post physician rankings publicly, even when the physicians notify them right away that their data are error-ridden. Health plans, when challenged, have not been able to demonstrate that such systems are reliable, nor that they result in higher quality care at lower cost. These marketing practice is at best misleading to patients and employers.  

TMA Concern With HB 1888 Due Process

Even though HB 1888 points to a due process that conforms to protections provided by a federal professional review action in 42 U.S.C. section 11112, it does not specifically provide for a review panel composed of physicians. TMA could not support a process that does not specifically allow for the participation of physicians in the review panel. The panel will be reviewing clinical information, which will demand the attention of a physician as well as some discourse among reviewers. We believe any review panel should be composed of at least three physicians who practice the same or similar medical specialty as the affected physician. This approach ensures that the grievance brought forth by the physician will be evaluated and considered fairly by those with the expertise necessary to meaningfully review the ranking decision.

We agree that the decision of the hearing panel should be binding. If the decision favors the health plan - the health plan may post/publish the physician's ranking or tier. However, if the decision favors the physician, the health plan must modify the ranking or tier before publication . TMA also believes that in those cases where the physician continues to disagree with the rank or tier, the health plan must prominently display a symbol that the physician disagreed with the finding.

Lastly, TMA believes that it would be better to lay out a due process in Texas law as opposed to binding ourselves to a federal law provision that could change. We also believe that a standard review process is needed and necessary.

Inconsistent Performance Measure Standards

While physicians strive to deliver high-quality care, there have not been sufficient data to help them identify areas needing improvement. When physicians are provided with meaningful information, they can implement corrective action to further improve care delivery. At the same time, useful information provided to consumers and purchasers will allow them to make more informed, value-based health care decisions that meet their needs. 

Many different private- and public-sector groups have attempted to step up to the challenge by designing models for assessing performance and reporting data. While progress has been made, the proliferation of multiple, uncoordinated and sometimes conflicting initiatives has significant unintended consequences for different stakeholders. For example, duplicative efforts:  

  • Unnecessarily burden physicians, other clinicians, and health insurance plans with different data requests, shifting focus away from quality and efficiency improvement;
  • Create confusion among consumers because different information is being publicly reported; and
  • Detract from efforts by employers to design programs that meet the needs of their employees.

Perhaps most important, however, are the adverse effects numerous initiatives have on patient care and the health care system as a whole.  Without a uniform approach to select performance measures for public reporting, these multiple initiatives will continue to divert limited resources and focus away from establishing clear quality and efficiency priorities, and reaching goals. 

Any standard used to measure physician performance and quality must be evidence-based and at a minimum recognized by the National Quality Forum (NQF), Agency for Health Care Research and Quality, and Centers for Medicare & Medicaid Services. Ideally, these measures should be those developed by the American Medical Association-led Physician Consortium for Performance Improvement.

TMA Concerns With the Use of Unspecified National Organizations

In section 1460.003, HB 1888 allows in addition to Ambulatory Quality Alliance and NQF the use of "other similar national organizations recognized by the commissioner."

Our concern with this broad allowance of other similar organizations is that health plans typically prefer to look to the outside entity, the National Committee of Quality Assurance (NCQA), for ranking standards. However, these ranking standards were developed to evaluate the performance of large groups, such as large health plans or large groups of physicians working in the same environment. You cannot use these same standards to evaluate individual physician practices. Individual physician practices see too few patients with any one disease to adequately evaluate their performance without some sort of risk adjustment. Even then, it is difficult because one small variation in the data, such as a death, can skew it. Another method must be developed to evaluate individual physicians. Unfortunately, that system does not exist today. So, in essence what NCQA promotes doesn't institute any accountability in the marketplace.


Chairman Smithee and members of the committee, these ranking systems cannot reliably assign costs to a given physician and most assuredly cannot assign quality - but this horse has already left the stable. Even though physicians have pointed out time and again that the data used by health plans are seriously flawed and inaccurate and have no basis in quality, it is something employers say they want to see offered.

The best you can do to ensure that employers and patients are making health care decisions about their physicians based on accurate physician data is to allow the due process to occur prior to the publication of the physician ranking. We also want to stress that the measurement standards used should be reliable, evidence-based, and used consistently across health plans in the market. This is the only way employers and patients can begin to make good health care choices. Thank you again for the opportunity to testify. I will be happy to answer any questions.

Last Updated On

March 13, 2011