What to Do If an Insurer Profiles You as a High Utilizer

The Letter Every Doctor Dreads

One of the most important lessons Ruth Williams, MD, has learned about the practice of ophthalmology in recent years is to open her mail.

Throwing away what looks like junk can mean missing important news—like the fact that a major health plan is offering incentives to steer patients away from your practice. "The physicians don't even know this is happening because the information comes in a preprinted envelope," says Dr Williams.

Dr Williams, president of the Wheaton Eye Clinic in Wheaton, Illinois, says every physician in the practice recently received such a letter from UnitedHealthcare. It stated the physicians did not meet the "cost and quality designation," Dr Williams says.

As a consequence, the insurer was charging higher copayments for patients of the Wheaton Eye Clinic ophthalmologists than it was charging for some other ophthalmologists in the area.

Such letters are arriving at the offices of physicians throughout the United States. Many have already had the experience of being removed from a patient's network. In these cases, the patients must pay higher out-of-network costs to continue to see them.

Now some insurers are using cost and quality data to sort physicianswithin networks into tiers with different copayments and deductibles.

Although insurance companies have been "economically profiling" physicians in similar ways for at least 20 years, the practice has accelerated with the implementation of the Affordable Care Act, according to William L. Rich III, MD, medical director of health policy at the American Academy of Ophthalmology (AAO). "It's really exploded in about the past 5 years," he says.

Table. Sample Tiers and Rates for UnitedHealthcare's North Shore-Long Island Jewish Hospital Advantage Plan^[1]

Tier	Primary Care Physician Copayment	Specialist Copayment	In-Network Coinsurance	In-Network Maximum Out of Pocket Cost	Emergency Department Copayment
Tier 1	$30	$250	10%	$1000	$200
Tier 2	$100	$500	30%	$2000	$200

These amounts are very significant.

In an email, Aetna spokesperson Sherry Sanderford says that her company assigns ophthalmologists and other physicians in its Performance Network to tiers on the basis of the hospitals they use. If the ophthalmologists don't use hospitals much, or they use tier-1 hospitals, they are sorted into tier 1. If they use tier-2 hospitals, they are sorted into tier 2 themselves.

Besides cost efficiency, Sanderford says, Aetna rates hospitals on the basis of adverse events; 30-day hospital readmissions; average length of stay compared with expected averages; data from the Centers for Medicare & Medicaid Services (CMS); and "cost efficiency" compared with other hospitals in that market.

Your rating may not only depend upon your specialty, but according to the hospital rating you use. If your hospital has a tier 2 or 3 rating you will also.  Some ophthalmology subspecialists admit more frequently (retina) because their patients are much more ill.

Most private insurance companies provide little public information about the software they use, and in general how they profile physicians. Representatives of UnitedHealthcare, the Blue Cross and Blue Shield Association, and America's Health Insurance Plans did not return phone calls. Queries to four other plans went unanswered.

So despite promises of patient-centered health care, openness and transparency are moot.

Accurate measures of cost-effectiveness can help individual ophthalmologists control their costs, he says. "There are people who do too many tests," he says. "They're going to get caught up in this web. I don't have a problem with that."

He does have a problem with data that don't capture the reality of the physicians' practices. Simplistic measures of cost punish subspecialists in particular, whose costs are higher because their patients have more complex conditions requiring more treatment. "They lump bad apples doing too many tests and good docs doing the right thing into the same basket and whack them," says Dr Rich.

That happened to three pediatric ophthalmology subspecialists at Northern Virginia Ophthalmology in Falls Church, Virginia, where Dr Rich is the senior partner, he says. "Cataract surgery in a baby is much more expensive than in an adult because it must be done in a hospital with specialized anesthesia" An insurer threw all three physicians out of a plan, claiming that their cataract costs were too high.

Being Profiled as a High Utilizer

Many private insurers use third-party "episode grouper" software that aggregates data from pharmacies and outpatient and inpatient care, then compares costs of treating episodes of illness among physicians, Dr Williams says. In theory, the software also incorporates information about the quality of care, but in reality insurers don't collect much quality data beyond patient satisfaction surveys, Dr Williams says.

"One of the challenges we all have as providers is that nothing, absolutely nothing, is communicated prior to the patient visit,"

What to Do if You're Unfairly Profiled

Physicians don't have to take their designations lying down, says consultant Reed Tinsley. "You appeal it," he says. "You sit down and say, 'Tell me how you graded me, and I want to see the data you used,' and compare. Insurance companies make mistakes, like anybody else." 

The trend is also likely to continue because payers see economic profiling of physicians as a successful experiment overall. "If you're a business, you're going to want to save money on your costs, so you're going to want your employees to have skin in the game when they decide to do a test or something," says Dr Rich. "The aggressive tiering of physicians and increased deductibles and copays are the reasons for the lowering of healthcare inflation since 2005."

Although physician profiling isn't likely to go away, it may become more sophisticated, says Dr Rich. Under a congressional mandate to develop its own episode grouper software, CMS is working to create algorithms that accurately link quality and cost data, he says. "They are struggling to do it right."

The agency has a long way to go, in his opinion. "The risk-adjustment factors they use have nothing to do with many subspecialties, each with it's own grouping of high cost diseases," 

Numerous specialty societies are developing registries on diseases with itemized costs, length and complexity of disease for payers to cmpare with provider costs.