News in brief - Aug. 11, 2003

Mass. Blues pays physician bonuses - AAFP EMR project targets small practices - HMO rates keep going up - Mich. passes small business insurance bill

Mass. Blues pays physician bonuses

Blue Cross Blue Shield of Massachusetts announced it will begin paying out about $16 million in bonuses to primary care physicians who satisfied the HMO's incentive requirements in 2002.

About 42% of the physicians who participate in the Blues' Primary Care Physician Incentive Program will receive the maximum payment of $3 per member per month, the insurer said. Doctors were scored based on how well they provided certain services, such as mammography, diabetes management and asthma medication management.

The HMO points to rising physician scores over the past few years as an indicator of more patients receiving the preventive tests they need. The Blues plan also has an incentive program for specialists.

AAFP EMR project targets small practices

The American Academy of Family Physicians is partnered with the Healthcare Information and Management Systems Society to conduct a six-month demonstration project of open-source electronic medical records software for small practices.

The two organizations are in the process of selecting up to 10 small family practices to participate in the project, which they expect to launch by Nov. 1. The announcement comes three months after the AAFP ended its effort to recruit the AMA and other medical associations to fund the development of a low-cost Internet-based EMR for physicians. HIMSS is an industry group based in Chicago.

HMO rates keep going up

Employers are mulling preliminary proposals from HMOs that would increase rates by 17.7% next year, according to a national survey of major employers by Hewitt Associates.

But the acceleration of managed care prices might be slowing some, according to the survey. Last year at this time, large plan sponsors were facing rate increases averaging 21% early in negotiations with HMOs. Plan sponsors generally are able to shave some of the potential costs through further bargaining and adjustments to plan features; final rate increases probably will be in the "low to mid-teens" for big employers next year, Hewitt said.

There are clear regional differences, however, in the outlook for HMO expenses. States in the Southwest are seeing proposals for the most significant increase in rates, at 26%, partly due to plan consolidation in that region. States in the Northeast, in contrast, are seeing proposed rate increases of just 13%. A reduction in hospital costs and more usage of generic and over-the-counter medications, among other factors, appear to be putting a brake on medical cost escalation and "may signal the moderation of health care increases over the next few years," said Ken Sperling, a Hewitt consultant.

Hewitt found employers continue to plan on shifting more of the responsibility for health care to workers through physician office and drug co-payments. Specialty care office co-pays of $15, for example, will be in place for 40% of employers in 2004 and 12% anticipate specialty office co-pays of $20.

Mich. passes small business insurance bill

Michigan has enacted a package of insurance reform legislation intended to improve affordability of coverage for employees of small businesses and cut down on "cherry-picking" of younger, healthier members to the detriment of older or sicker patients who desire coverage.

Gov. Jennifer Granholm said the measures would help stabilize the insurance market and slow the sharp increase in premiums that many in the state have seen in recent years.

The legislation was supported by Blue Cross Blue Shield of Michigan but opposed by some business groups, including the National Federation of Independent Business, which said it could result in more market domination by the Blues plan. Among other provisions, the law allows Blue Cross for the first time to charge varying rates based on how old group members are.

Under the legislation, commercial insurers are constrained from offering large discounts to small groups that are young and healthy, while at the same time charging much higher rates to groups with workers who are older or who have chronic diseases. It also mandates that commercial insurers must cover any small group that wants coverage.

The law applies to plan sponsors with up to 50 workers.