After receiving complaints from doctors, Blue Cross and Blue Shield of Minnesota reversed its decision to put physicians in different price tiers as part of a new insurance plan.
Thursday's announcement means doctors will not be penalized for referring patients to hospitals that Blue Cross defines as more expensive.
The Blues, the state's largest health insurer, initially said its new insurance plan would divide hospitals and doctors into two tiers based mainly on cost.
Hospitals and doctors were to be labeled tier I or tier II, with less-expensive tier I hospitals and doctors preferred, having lower copayments and coinsurance for patients.
The Blues initially said physicians who didn't promise in writing to refer patients only to cheaper tier I hospitals would be placed in tier II -- and patients who visited tier II doctors would have had higher out-of-pocket expenses.
The revised plan allows doctors to refer to both categories of hospitals interchangeably, although patients who go to the more expensive tier II hospitals still will incur more expenses.
Blues executives said the plan was a work in progress. "We need to do more work in refining our methodology," said Michael Morrow, senior vice president of business development and network management. "We need to refine how we look at cost and quality in a physician."
Doctors had said their hands were tied, since the largest hospitals, and specialty hospitals, were placed in the more-expensive tier.
"We applaud Blue Cross' willingness to listen to our concerns and to reconsider their decision to move forward with the implementation of a plan that we considered flawed," said Minnesota Medical Association President Michael Gonzalez-Campoy, M.D.
The plan to place hospitals in tiers remains.