Profiling methods can vary from insurer to insurer, but most health insurers claim to compare physicians’ performance in terms of quality and cost efficiency of care to that of their peers in the same specialty and market. Health insurers may also evaluate physicians against certain predetermined targets or benchmarks. Insurers use claims data to profile and rank physicians.
The accuracy of insurers’ rankings and profiles is compromised by the inherent limitations involved in working with claims data, including the time lag between the delivery of care and the availability of data, difficulties in correctly attributing care, and missing or incomplete information.
Additionally, the methodology used by insurers to rank physicians can be flawed. A 2010 study by the RAND Corporation found that insurers’ physician profiles are often inaccurate, leading to unfair representations of physicians to the insurers’ customers.
Physician profiling can financially impact a practice in several different ways, including affecting how consumers select physicians (refer to Tiering and narrow networks). To ensure the continued success of their practices, physicians must understand the profiling programs of the insurers with whom they contract and how health insurers are presenting their practice to patients.
Profiling systems also can be used as a basis for financial incentives under pay-for-performance (PFP) programs, in which plans award monetary bonuses to physicians who achieve certain benchmarks and outcomes of care.
Learn more about physician profiling and AMA’s advocacy in this area through the resources listed below.
- As an expert consultant to the AMA, J. William Thomas, PhD, has written a ten-page paper, Economic profiling of physicians: What is it? How is it done? What are the issues?, explaining in detail the process health plans use to profile physicians on cost. An abbreviated version is also available. This resource defines common terminology used in health insurers' physician profiling programs.
- Physician profiling: How to prepare your practice
This flyer offers five steps for physician practices to follow in preparing for insurers' profiling programs. These steps encompass the basic elements of the physician profiling process: contract language, program metrics, data, coding and patient education.
- How to challenge your “profile” or placement in a tiered or narrow network
This resource offers physicians seven steps to follow when challenging their network placement with insurers. These steps mirror the problems physicians have identified with these types of programs (i.e., the use of claims data, inadequate risk adjustment, lack of an appeal mechanism and invalid ratings).
- An introduction to risk assessment and risk adjustment models This document defines the terms "risk assessment" and "risk adjustment," and provides overviews of the prominent risk assessment and risk adjustment models and their various uses, including profiling physicians and other health care professionals.
- Review of the Massachusetts group insurance commission physician profiling and network tiering plan: A report to the Massachusetts Medical Society executive summary
- Review of the Massachusetts group insurance commission physician profiling and network tiering plan: A report to the Massachusetts Medical Society
The AMA, working with the Federation, has achieved improvements in the accuracy and transparency of physician profiling activities throughout the country. Major accomplishments are listed below:
- AMA instrumental in nation’s first profiling regulation
The AMA and Medical Society State of New York helped educate the office of then-Attorney General for New York State Andrew Cuomo about the myriad problems associated with inaccurate physician profiling. The seven major insurers in the state ultimately settled with Cuomo on new criteria that must be followed when performing profiling in that state. The CIGNA settlement is representative of these agreements to which the insurers pledged to follow in all locales.
- Initial nationwide profiling standards developed: The patient charter
This document was drafted by the Consumer-Purchaser Disclosure Project, a private health care coalition, and contains most of the provisions of the Cuomo settlements. The AMA was instrumental in revising the final version which is endorsed by many of the national health insurers.
- AMA model legislation
The AMA has drafted model legislation governing the process of conducting physician profiling. The Colorado Medical Society has been successful in getting that state to pass a similar bill, while other state medical associations have successfully gained passage of portions of the model legislation. Please email for more information on the AMA’s model legislation.
- Physician profiling programs: Analysis and reform
The “Value, accuracy and transparency in physician profiling programs: A comparison of four physician profiling documents“chart provides a side-by-side comparison of the major components of four initiatives (AMA model legislation, New York Attorney General settlement, Colorado’s Physician Designation Disclosure Act, and Patient Charter) that focus on reforming the systems designed to measure and provide physician profiling information to the public and physicians.
- RAND studies confirm AMA profiling concerns
The RAND Corporation issued a series of studies, co-sponsored by AMA, looking at the state of the art of physician cost of care profiling. These studies concluded that, "current methods of physician cost profiling are not ready for prime time," and that, "current cost profiling approaches need to be improved, or new approaches need to be developed," as stated in their paper summarizing the series of papers.
While the AMA supports efforts to improve health care quality and efficiency, it cannot support current health insurer physician profiling programs that provide incorrect physician ratings and misleading information to the public. Based on these studies, the AMA sent a letter to most of the leading U.S. health insurers asking them to work with the AMA and state medical associations to re-evaluate the use of any programs that involve profiling physicians based on their alleged cost of care.
Nearly every major health insurer sponsors a physician profiling program to drive pay-for-performance, tiered network, narrow network and/or public reporting systems. Physicians are currently facing several challenges in using the data provided by insurers through these profiling programs.
At present, health plans each use their own unique format for reporting physician data. Physicians find it difficult to decipher the various reporting formats and understand the data, and consequently, they pay little or no attention to the reports. Many insurers’ data reports also lack sufficient detail to be actionable by physicians.
The AMA has been working on several initiatives to improve the accuracy and transparency of data provided to physicians by public and private payers. The AMA’s Standardized Physician Data Report creates a standardized format for reporting physician data. The report follows a hierarchical format that allows physicians to drill down to the patient-level detail that is needed to verify report accuracy and to identify opportunities for practice improvement. The AMA is encouraging insurers to adopt this, or a similar, format to increase the uniformity in physician data reports and to make it easier for physicians to understand and use their practice data.
The AMA has also created “Guidelines for Reporting Physician Data”, which were developed in collaboration with the Federation of Medicine, insurers, the Centers for Medicare and Medicaid Services, employer and consumer groups, and accrediting organizations. These Guidelines were released in March 2012 and provide guidance for the preparation of physician data reports. The AMA urges all payers to publicly affirm their support for these Guidelines and incrementally implement these concepts in their reporting systems to improve the quality and transparency of their physician data.