Colorado Enacts Physician Profiling Measure

Colorado recently became the first state to enact legislation requiring insurance companies to disclose the data and methodology they use to determine physician "designations," or ratings. Supporters have heralded the move as bringing a degree of transparency and openness to the physician profiling process that did not previously exist.

The Colorado bill, S.B. 138, (10-page PDF; About PDFs) gives physicians the right to access insurance company profiling and methodology data and the ability to challenge and, possibly, overturn current ratings. Gov. Bill Ritter signed the bill into law in early June.

"The Colorado legislature recognized that there is a balance between how plans do their business and being fair to the doctor, because it is all about the consumer getting the correct information," said Alfred Gilchrist, CEO of the Colorado Medical Society, in an interview with AAFP News Now. "That's what the Colorado legislature focused on, and that is what the bill's sponsors focused on. They were much more interested in making sure the consumer got accurate information, and they clearly saw that the way to do this was to make sure the plans and doctors were working together on this."

According to the legislation, insurance plans are required to provide a description of the methodology and data used to create a physician designation within 45 days of a request from a physician. Insurance plans also are required to establish a process, that gives physicians the right to appeal -- and, possibly, overturn -- a designation. In addition, insurance plans have to notify physicians about the use of or a change to designations.

The health insurance ratings are published in provider manuals and are available via the Internet, said Gilchrist.

Although the bill does not tell insurance companies how to rate physicians, it does establish legal standards for transparency and notification, putting in place basic mechanisms for fairness in terms of how insurance companies rate physicians, explained Gilchrist.

"I don't think doctors even had a heads-up that the rankings were coming -- much less a discussion about their data," he said.

The Colorado legislation primarily is a response to a physician profiling system used by UnitedHealthcare, or UHC, the largest insurer in the state. UHC relies on a two-star rating system, awarding physicians one star for quality and one for efficiency if they meet quality and efficiency standards based on claims data, Gilchrist said.

Physicians do not object to being profiled, but many highly regarded physicians in Colorado were "inappropriately profiled," creating a great deal of angst in the state and a need for the bill, Gilchrist explained.

He added that UHC worked with physicians in the state to pass the profiling legislation. "We were extremely pleased United cooperated throughout the process, and even when a competitor plan tried to torpedo negotiations, (UHC) said, 'No, we are working with the medical profession,'" Gilchrist noted.

Earl Carstensen, M.D., M.P.H., of Aurora, Colo., said he has spent the past 40 years building what he describes as an "exemplary practice" in his community. But last year, he received a letter from UHC saying he failed to meet the company's standards for efficiency and would not receive a star in that area.

"I took it personally because of the kind of physician I am," said Carstensen, who is a member of the Colorado AFP Board of Directors.

Although Carstensen appealed the decision last November, he did not hear anything from UHC until August of this year. "By that time, we had gone into the next year, and I passed the efficiency rating for the next year," he explained. "But I did not receive any explanation or helpful communication about the one I failed and what I might do to change."

In the meantime, Carstensen became an advocate for S.B. 138, which he describes as a "unique accomplishment for Colorado and one potentially helpful tool to aid Colorado physicians pursuing quality patient care."

Colorado is not the first state to address physician profiling. In late 2007, UHC and two smaller insurance carriers signed a legal statement saying they would abide by rules on physician profiling put forth by New York Attorney General Andrew Cuomo. Only a few weeks earlier, CIGNA, Aetna and Empire BlueCross BlueShield had agreed to restructure their physician ranking programs.

The New York agreements have implications far beyond that state, because UHC -- along with CIGNA, Aetna and Empire's parent company, WellPoint -- agreed to apply the principles nationwide. WellPoint is the largest insurer in the country, followed by UHC and then Aetna.