Insurance companies are using physician profiling to include doctors in special networks, negotiate physician contracts and determine physician compensation.
But some experts have questioned the idea of tying profiles to pay.
The ethics of that question is a main concern of a lawsuit filed late last year by more than a dozen orthopedic surgeons who say Anthem Blue Cross and Blue Shield of Connecticut, based in North Haven, may have unfairly used profiling to differentiate what all physicians across the state are paid. The surgeons are all members of the Connecticut Orthopaedic Society.
Profiling involves comparing physician performance on utilization of services, adherence to clinical guidelines and other measures. The goal is to identify providers who are "outliers," who use more services or have higher costs than other physicians, and urge them to make changes that lower costs.
The suit, which was filed in Superior Court and refers to profiling as a "discriminatory" practice, could be the first of its kind, says New Britain-based attorney William Sweeney Jr., who is bringing the suit along with two other lawyers. He has researched the topic and has not found any other lawsuits that address the issue.
"Reimbursements are being made around the state in an unequal fashion, and I believe that is because of profiling," Sweeney says. If that's true, physicians were aware that profiling was being done but were not aware that it was being tied to compensation, he says.
Anthem, however, denies that profiling has been used to determine how much physicians are paid. "Profiling is not tied to reimbursement," says Mary Ellen Butler, a spokeswoman for Anthem.
The company says it uses profiling to measure quality indicators that the insurer reports to the National Committee for Quality Assurance and to track the utilization patterns of Anthem enrollees. Anthem sends reports to its providers that compare their data to those of other providers with similar patients, Butler says. Anthem has 7,200 physicians in its PPO and 5,700 physicians in its HMO.
The lawsuit is in its early stages, and investigation into the insurer's records will begin in the next three months, Sweeney estimates. He does not know when the case--which also questions denials of claims and late payments and argues that Anthem has harmed physicians financially and damaged physician-patient relationships--will go to trial.
Other insurers around the country use profiling in contract negotiations and to set payment rates, says Neill Piland, research director at the Medical Group Management Association's Center for Research in Ambulatory Health Care Administration in Englewood, Colo.
Yet many physicians, consultants and even some insurance company executives say profiling, which is often based on claims data, is not yet reliable enough to use for such purposes. Adopting better methodologies and adjusting for the severity of patients' conditions will improve profiling, Piland says.
The practice of linking compensation and profiling data, however, is probably not illegal, says Evelyn Eskin, president of Health Power Associates, a Philadelphia-based consulting firm. And when it happens, physicians usually know about the arrangement up front, she says. Contracts between physicians and insurance companies, for example, might include incentives for meeting productivity goals, or they may include clauses that state if a physician overuses the emergency room or doesn't pay attention to the health plan's guidelines, the physician will be financially penalized.
"Managed-care companies have to have some way of differentiating quality and efficiency among their doctors," Eskin says. "One of the biggest things about managed care is that for the first time, doctors are being measured against each other, and that has been one of the hardest things for doctors to get accustomed to. But I don't think this is going to go away. It is going to get more and more common."
Insurance companies have to work hard to get profiling right, Piland says. "Strong methodologies have to be in place for these profiles to be useful. They have to be quite accurate. Profiles have to reflect what physicians do on a day-to-day basis but also have some firm foundation in the types of patients that they are seeing."
Too often, insurers don't dig far enough to find out what the numbers mean, says Susan Bellile, president of Q3, a healthcare consulting firm based in Oak Park, Ill. She has helped several physicians fight back when insurance companies send profiles that are inaccurate or do not take into account things like a surgeon's specialty--things that may end up affecting how much the physician is paid, she says.
"Profiling really only highlights a difference," Bellile says. "All the data says is that this person is different from the average. But health plans don't dig beyond that and find out why. They are making a judgment that the difference is a bad thing and that the physician who is different should change. That's just not always the case."
Challenging profiles still is an unusual thing for physicians to do, but it's getting more common, experts say.
For example, one surgeon Bellile works with spends a majority of his time doing complex and expensive sinus procedures. A major insurance company has been comparing his practice with other physicians, including some who specialize in lower cost surgeries. And the insurance company has complained that the surgeon's cost per hospital admission is too far above average.
Bellile and the physician brought data to the insurer showing why the costs are higher, yet the company continues to issue reports that make the surgeon look bad. The insurer also has inferred that the physician might lose his status as a preferred provider, Bellile says.
Misleading profiling reports aren't uncommon, says Lee Newcomer, M.D., senior vice president of health policy and strategy at Minneapolis-based UnitedHealthcare. That's why United has set up a procedure for physicians to flag problems in the reports the insurer sends them. If physicians notice a problem, they simply fax back a form explaining the issue, and data from the patient in question is not included in subsequent reports, Newcomer says.
For example, one patient who rides in rodeos for a living has a condition that medical guidelines say calls for an anticoagulant. Because of his profession, a blood thinner would be dangerous so his physician did not prescribe it. Still, United's profiling report showed the doctor had failed to meet the standard of care for the patient.
The physician faxed over an explanation, and data on that patient is no longer included in the physician's profiles, Newcomer says. United could not have known the patient's occupation from the claims data it uses for profiling, he adds.
These kinds of issues are why United is not yet tying compensation to the reports, Newcomer says. "Profiling is new enough that it still has some bugs in it, and I'm reluctant to start putting dollars on reports where we still know there are some bugs."
Still, United may eventually offer incentives based on the reports, which track standards of care such as prescribing beta blockers to heart attack patients, Newcomer says.
"The day will come when we will tie pay to profiles, but it will be an upside compensation," he says. "Those people with exceptional scores would have the ability to earn some more money. But we don't intend to penalize anybody based on these reports."
MargaretAnn Cross is an Allentown, Pa.-based writer who frequently contributes to Modern Physician.