MDs who are deemed less 'cost efficient' lose out in new performance program

June 1, 2005

One insurer's "Performance Designation Program" has begun steering patients to network physicians who the insurer has determined provide higher quality of care at a lower cost than their peers.

One insurer's "Performance Designation Program" has begun steering patients to network physicians who the insurer has determined provide higher quality of care at a lower cost than their peers. Those physicians who meet the insurer's criteria are identified with stars next to their names on the company's Web site, and patients who receive care from these providers are charged a lower co-payment than if they used another network provider.

UnitedHealth Group's pilot performance-rating program has provoked the anger of several medical organizations, including the American Medical Association and Medical Group Management Association. At least one large health system-BJC HealthCare in St. Louis-has threatened to terminate its contract with the insurer, unless the program is suspended or radically changed, according to Modern Healthcare (4/4/05).

The insurer initially rated physicians based on their ability to adhere to evidence-based standards of care and/or had the lowest complication rates. It then judged their efficiency rates, giving stars to those physicians whose treatment cost score was at or below 80% of the market.

Because of their complaints, the insurer has since adjusted its economic criteria so that physicians can be designated with a star next to their names if they meet average market costs. But opponents contend that the concession is not enough to repair the damage.