Quality and Cost Provider Scoring

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June 19, 2014

Very recently, we have seen commercial payors begin to roll out provider scoring systems. Information about the specifics of these systems is still developing, so I am not providing details at this time. Some of you may have already encountered this issue in connection with United Health’s provider tiering system.
Under this scoring system, payors will rate providers based on quality and cost. Provider ratings for cost and quality are made public by publication on the payor’s website. It is our understanding that health insurance products may be offered in the future that provide incentives for patients to select providers who have better quality and/or cost rankings. For example, patients may have a lower co-pay if they receive service from a provider with a better quality and/or cost ranking.
The problem with this system is that it is not clear what data is being used by the payor to rank providers. In at least some cases, the data being used appears to be highly inaccurate and may include data that is not impacted by the specific provider.
Providers should become aware of any provider rating systems being implemented by payors. You should determine how you rank in all aspects of the payor’s system. If your rating is less than satisfactory, you should push the payor to provide you with the data it used to make its determination. You may discover the data that is being used is inaccurate, incomplete, or overly broad. For example, the payor’s system may include the services of providers who refer to you and/or to whom you make referrals. This may result in inclusion of data over which you have absolutely no control.
We are beginning to hear stories of payors imposing unreasonable burdens on providers who want to investigate the data being used to rate them. For example, providers may be given a very short window in which to review applicable data. Provider review may require audit of the individual patient records. If the number of claims is large, the provider may be forced to expend significant resources just to verify the data being used.
A provider could be seriously damaged if the data used as the basis for the rating is flawed. In addition to devotion of resources to question the data, the publication of an inaccurate rating could cause a loss of patients and revenue to the practice. Practice losses will be even more serious if payors launch insurance products that provide financial incentives to patients to steer away from providers and who have less than favorable ratings.
For more information on these issues and approaches for dealing with payor rating systems, feel free to contact Ruder Ware Health Care Attorney John H. Fisher, II.

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