Ranking plans face legal scrutiny

November 16, 2007

Perspective

Late last month, New York Attorney General Andrew M. Cuomo announced that his office had reached an agreement with Cigna HealthCare on major revisions to its physician-ranking programs in the Empire State, and beyond.

Under the new pact, Cigna promises, among other things, to broaden its ranking criteria beyond cost, use generally accepted national standards to measure quality, disclose program design elements to consumers and physicians, and hire an independent watchdog (subject to AG approval) to monitor its compliance.

The agreement grows out of Cuomo's industry-wide investigation of physician-ranking programs. In separate letters to six plans, Cuomo and his staff raised a laundry list of concerns.

If its "profit motive" prompted Cigna to choose the cheapest but not necessarily the best doctors, New York's legal eagles wanted to know that. It's "a conflict of interest," the AG's office said in its letter to the company, and the fact that employers might financially induce employees to pick such physicians only compounds the problem.

Cigna wasn't the only plan with a potential conflict of interest. BCBS' Blue Precision, for instance, offers employers three versions of its program, with a progression that moves from just the facts to we'll penalize you if you use these doctors rather than the ones we prefer.

Ranking programs have come under the gun in other states besides New York. In Connecticut, Louisiana, Minnesota, Missouri, Texas, and Washington state, physicians have argued, often successfully, that they're financially driven and based on flawed data, among other things.

Doctors applaud the new agreement

In the press conference announcing the Cigna agreement, AMA President-elect Nancy H. Nielsen praised both Cuomo for his "groundbreaking agreement" and Cigna for "renouncing physician evaluations and rankings based solely on economic factors." She hoped the deal would push other states to follow suit.

The managed care industry has reacted more cautiously. Spokesperson Susan Pisano of America's Health Insurance Plans (AHIP), the industry trade group, says that "many of the elements" of the agreement seem "consistent" with the AQA alliance, a national quality initiative that includes physicians, consumers, payers, and plans. As for AHIP itself, "our folks are still looking at all the i's and t's," says Pisano.

The cautious attitude isn't surprising, considering the industry is still unwilling to accept that some physician-ranking programs are cost-driven and, therefore, "potentially deceptive," to use Cuomo's phrase.

In fact, a little more than two weeks before Cuomo announced his agreement with Cigna, AHIP included a friendly Washington Times story on ranking programs on its consumer website, HealthDecisions.org. The story called attention to a recently released legal analysis that "validates healthcare insurers' use of ranking systems to rate physicians' job performance."

Well, not quite. The analysis, released jointly by The George Washington University School of Public Health and Health Services and the Robert Wood Johnson Foundation, supports the fundamental legality of tiering or ranking programs, but only when such programs include certain "transparency" measures.

Skip these crucial first steps, the suggestion is, and all that's left is old-fashioned-and possibly illegal-smoke and mirrors.