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Fam Pract Manag. 2002;9(2):23-24

Six health plans to begin paying for quality

On Jan. 15, six of the largest health plans in California announced a combined effort to improve health care in their state by rewarding physician groups for quality. Under the Pay for Performance initiative, the participating health plans – Aetna, Blue Cross of California, Blue Shield of California, Cigna, Health Net and PacifiCare – will use a common scorecard to measure physician group performance and reward them financially for their efforts.

The actual performance measures are still being finalized, but the current proposal includes three preventive health measures (childhood immunizations, breast cancer screening and cervical cancer screening); three chronic care measures (related to asthma, diabetes and heart disease); patient satisfaction measures (related to ease of access and service); and a measure reflecting a commitment to information technology. The clinical measures will receive at least 50 percent of the weighting.

The Pay for Performance initiative, spearheaded by the Integrative Healthcare Association (IHA), is designed to give physicians incentives to improve quality and service to their patients. Current physician reimbursement systems are ineffective, says IHA, because they tend to reward volume or cost-effectiveness.

The amount and nature of the performance awards under the new plan will be left to each health plan’s discretion, but IHA has recommended that the bonuses be “significant.”

An independent entity will validate each group’s performance data and prepare a consolidated scorecard, which will be made public. Physician groups are not required to participate in the program.

“We have finally created a business case for quality at the physician group level,” said Steve McDermott, president and CEO of Hill Physicians Medical Group and chair of the IHA board of directors. “We now have an opportunity for significant financial rewards if we do a good job. Our patients will be healthier, and our physicians will be happier.”

The Pay for Performance program is scheduled to be fully operational by January 2003.

PRACTICE PEARLS from here and there

Increase harmony in your practice

While it may seem counterintuitive, one way to increase harmony in your practice is by making time for disagreements. Schedule regular meetings with your colleagues and staff to talk about issues that cause conflict, such as what constitutes a fair call schedule. The goal of these meetings is to get feelings out in the open and work toward a solution.

– Pfifferling H. Reducing discord in your practice.

Group Practice Solutions newsletter. Conshohocken, Pa: Advisory Publications; October 2001:4–5.

Compliance date extended for HIPAA transactions rules

President George W. Bush has signed a bill giving health care providers and insurance plans an additional year to comply with the Health Insurance Portability and Accountability Act (HIPAA) transactions and code sets standards. These standards will replace the hundreds of local and proprietary formats and codes currently used for the electronic exchange of patient-identifiable health information. The new deadline for compliance is Oct. 16, 2003. Those choosing to use this extension must submit a form detailing how they will achieve compliance to the Department of Health and Human Services (HHS) prior to Oct. 16, 2002. HHS is required to develop this form by March 31, 2002.

The compliance deadline for the HIPAA privacy standards remains unchanged. It is April 14, 2003. The deadline for the HIPAA security standards has not yet been set, as the final regulations are not expected until later this year.

For more information about HIPAA, visit FPM’s collection of articles at

It’s official

Despite opposition, the federal government has reduced physicians’ Medicare reimbursement rates by 5.4 percent for 2002. This across-the-board cut in the physician fee schedule represents the largest one-year decrease since the fee schedule was implemented in 1992. According to the Jan. 15 Wall Street Journal, the cut isn’t likely to cause a mass exodus of physicians from Medicare. “Doctors don’t change very quickly,” said Paul Ginsburg, president of the Center for Studying Health System Change. Instead, he predicts that physicians will “wait to see if some fees are restored” in 2003 before they make any move.

Health insurance costs rise

Health insurance prices rose an average of 11 percent in 2001, the highest increase since 1992, according to an annual survey from the Kaiser Family Foundation and the Health Research and Educational Trust. Part of the reason for the increase was rising drug costs. Average premiums in 2001 were $2,650 per year for individuals and $7,053 per year for families.

The price of noncompliance

If pharmaceutical costs and co-payments continue to rise, drug noncompliance may become more common, suggests a recent survey from Harris Interactive. Due to cost concerns, 22 percent of adults surveyed did not fill a prescription during the last year, 14 percent took a smaller dose than prescribed and 16 percent took their medication less often than prescribed. Noncompliance in order to save money was higher among low-income groups and those with disabilities.

Complaints wanted

Frustrated with the administrative hassles of managed care? The American Medical Association wants to know about it. Its new online Health Plan Complaint Form is a confidential method for physicians to detail the types and severity of problems they face with insurers. The form is available at The AMA will not act on individual complaints but will use the data collected to identify trends, facilitate discussions with insurers and build the case for legislative action.

Free publicity online

Physicians with practice Web sites now have an easy way to make sure their patients (and potential patients) can find them online. At, physicians can enter their Web site address and have it submitted to two dozen popular search engines for free. Physicians can also sign up to receive a free newsletter with tips for promoting their organizations online.

Ignoring the recommendations

A majority of doctors are not prescribing the most commonly recommended drug for urinary tract infections, reports a study in the Jan. 14 Archives of Internal Medicine. Trimetho-prim-sulfamethoxazole is the drug of choice because it lessens concerns about antibiotic resistance and costs about $2 for a 10-day course, yet it was prescribed only 24 percent of the time in 1998, down from 48 percent in 1989. Meanwhile, antibiotics costing up to $70 for a 10-day course were prescribed more often, even though they are not highly recommended. Internists and obstetricians were more likely to prescribe the higher-priced antibiotics than family physicians and general practitioners.

“Prescriptions: Why They’re So Complicated”: an FPM Patient Handout

This patient handout continues our series designed to help your patients navigate the health care system. It can also help you deal with problems that arise when patients misunderstand their insurance benefits or have unrealistic expectations of you. Other FPM handouts include “Understanding Your Health Plan’s Rules” [September 2001, page 26] and “Understanding Your Insurance Coverage” [June 2001, page 43].

This handout was written by James Bare, policy analyst for the AAFP. It explains in simple terms the complexities associated with getting prescriptions filled. You are free to copy this handout for use in your practice.

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Copyright © 2002 by the American Academy of Family Physicians.

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