California Blue Cross offers quality pay incentive plan for PPO

Physicians aren't jumping at the chance to sign up for the program, which could bring a $5,000 bonus.

By Mike Norbut, amednews staff. Nov. 11, 2002.

Physicians may question its design or implementation strategy, but in a rare move, one of California's largest health plans is planning to extend its physician quality incentive program to its PPO.

Blue Cross of California, which last year initiated a quality scorecard for physicians who had contracted with its HMO, is expanding the scorecard system to individual physicians with promises that the quality criteria will not put any undue stress on the doctors who participate.

Bonus standards
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Region: West

The Blue Cross plan, which would award a $5,000 bonus to its highest-scoring PPO physicians, is one of a growing number of programs across the country that bases incentives on quality rather than cost control. Several insurers, including Indianapolis-based Anthem and Blue Cross Blue Shield plans in Massachusetts and Illinois, also have physician quality initiatives.

The Centers for Medicare & Medicaid Services recently announced that it, too, was starting a quality pilot program, initially offered to groups of 200 physicians or more.

Industry analysts are calling the Blue Cross plan -- which would affect 4.1 million PPO members in California, about double the number of people enrolled in the Blue Cross HMO plan -- a giant step forward. Its focus extends beyond the large medical groups, which until now have been the primary targets of most incentive programs.

The plans produce results, advocates say. For example, the Illinois Blues plan, owned by Health Care Service Corp., reports that only 2% of physician groups participating in its quality program in 1998 had a 70% or higher rate of women who had a Pap smear, but 34% of groups reached that target in 2000.

Blue Cross holds about 40% of the PPO market share in California.

Insurers say quality incentive programs help keep people healthier, but they realize that there's an incentive for health plans as well.

"Our experience is when the physician intervenes at the right time, at the right place, with the right clinical response, it achieves the most effective cost savings," said Blue Cross of California spokesman Michael Chee.

Blue Cross, a division of Thousand Oaks, Calif.-based WellPoint Health Networks Inc., holds about 40% of the PPO market share in California.

Doctors skeptical

California physicians question the timing of the Blue Cross announcement -- just as open enrollment periods often start -- and the sincerity of the plan.

While they say quality measures are vital, if any monetary amount provided enough incentive to participate in the program, the $5,000 figure Blue Cross has quoted would not be it.

"Even for $5,000, the notion of us changing how we practice for money is absurd," said Robert Hertzka, MD, an anesthesiologist from San Diego. "We practice the best we know how."

Eventually, the plan would cover all 43,000 PPO physicians.

The Blues plan would grade physicians based on 16 points, including care of patients with chronic conditions and the delivery of preventive services. Some other criteria would include filing claims electronically, accepting new PPO patients and keeping health care costs down by prescribing generic medication.

Physicians will be able to compare their scorecards with other physicians, but grades will not initially be available to the public, Chee said.

Eventually, the plan would cover all 43,000 PPO physicians, though it will be introduced to about one-third of them initially, and only about 5,000 in northern California would be eligible for the bonus.

Blue Cross has estimated that it will spend $1.1 million to administer the program over the next three years. But Chee said bonus funds would not come from that pool, and the insurance company is prepared to pay the full bonus to each physician, if it is warranted.

Although the HMO program is mandatory, Chee said the PPO program was voluntary and would not require any capital investments, such as software or equipment, to participate. Doctors can be downgraded, though, for such things as not having an electronic medical record system or not accepting new patients, even if they're overbooked already.

Dr. Hertzka said that criterion was in direct violation of the recently signed Health Care Providers' Bill of Rights in California, which allows a physician to refuse new patients beyond the contracted number if it would endanger access to care or continuity of care for current patients.

Samuel Fink, MD, an internist based in Tarzana, Calif., near Los Angeles, took issue with the generic prescription point, saying the cheaper route isn't always the best one.

"When we're done with the criteria, I wonder if the patient might be better off with a physician who has a lower score than a higher one," said Dr. Fink, a board member of the Los Angeles County Medical Assn.

Ronald Bangasser, MD, a family physician and director of external relations for Beaver Medical Group in Redlands, Calif., said the Blue Cross plan is not practical because the grading points are too broad. Another problem he foresees is each plan coming up with its own set of criteria, which would burden and frustrate physicians who work with multiple insurers.

Dr. Bangasser, president-elect of the California Medical Assn., has been part of the planning process for a standardized pay-for-performance plan initiated by the Integrated Healthcare Assn., a California group made up of representatives from across the health care spectrum. The program includes participation from six California health plans, including Blue Cross, and will apply universal standards to participating physician groups.

Individual physicians, however, "have less ability than large groups to share information," because of the limitations of a smaller office, Dr. Bangasser said.

Ultimately, the success of incentive programs will depend on finding a simple way to gather and share data, said Mohit Ghose, a spokesman for the American Assn. of Health Plans.

"There's no central depository for information," Ghose said. "That's one hurdle that most [health plans] are facing."

ADDITIONAL INFORMATION:

Bonus standards

Here are some of the 16 criteria points Blue Cross of California plans to use to rate physicians who participate in its PPO Physician Quality and Incentive Program:

Care management for chronic conditions, such as cancer, diabetes, asthma, heart disease and mental health conditions. Diagnostic tests related to these conditions will be measured.
Frequency of preventive care services ordered and provided, such as childhood immunizations as well as breast, cervical and colorectal cancer screenings.
Board certification.
The use of electronic records and filing claims electronically.
Prescribing of generic medication instead of brand names when appropriate.
Acceptance of new patients.