Health plan systems that score physicians on how carefully they control costs misclassify or are "woefully inaccurate" up to 66% of the time. The systems don't provide the doctor or the patient with meaningful information, the American Medical Association and 46 state medical societies told 47 health plans.
In a letter addressed to the CEO and chief medical officer of each plan, the AMA and the Federation of Medicine say they "cannot support payer programs designed to steer patients to certain physicians and practices based on inaccurate physician ratings or primarily on physician cost of care profiles without regard to the quality of services provided."
They demand "immediate action to improve the accuracy, reliability, and transparency of physician ratings."
The organized medicine groups pointed to a March study by the RAND Corp. published in the New England Journal of Medicine, which said one-fourth of the 13,788 physicians they studied "would be misclassified under the system of cost ranking commonly used by insurance plans."
In studying 28 physician specialties in detail, the RAND researchers found that only about 40% of physicians had cost profile scores that were at least 70% reliable, and fewer than 10% had cost profiles that were at least 90% reliable.
The RAND Corp. based its analysis on four health plans in Massachusetts, and questioned the practice of cost profiling to decide which physicians are included in which health plan network. "Patients often are provided financial incentives to use physicians that have lower cost profile scores," RAND says.
"Our findings raise questions about the utility of cost profiling tools for high-stakes activities such as tiered health plans and the likelihood that wide use of these strategies will reduce healthcare spending," says John L. Adams, lead author and RAND Health senior statistician.
Two other RAND Health studies, one in the March 5 issue of the Biomed Central Health Services Research and another in the May 18 Annals of Internal Medicine "confirm our concerns," the medical groups said in their letter.
Asked to respond to the AMA letter, Robert Zirkelbach, spokesman for America's Health Insurance Plans, says "there is widespread agreement among stakeholders that measuring and reporting on physician performance is essential to moving toward an evidence-based health system."
"Employers are increasingly looking for health plans to develop these incentives; patients are increasingly looking for more information on cost and quality and CMS in the health reform law will be setting up a physician compare website, (similar to its Hospital Compare,) to measure quality," he says.
And, he says, AHIP disputes the conclusions in the RAND reports saying the methodology focused only on a few plans in one state.
However, he acknowledges that "Of course room for improvement. Health plans are working with physicians to address concerns that have been raised, to make sure the data is as accurate as possible and is reported in a way that's helpful to consumers."