Colorado moves to regulate tiered networks

The state's bill follows national agreements by health insurers to make physician-rating systems more transparent and based less on costs.

By Emily Berry, AMNews staff. May 5, 2008.

Although some major health plans pledge to institute nationwide standards on how tiered networks are set up, Colorado isn't waiting.

A bill on the desk of Gov. Bill Ritter Jr. would require plans to disclose data and methodology in reaching physician grades and tiering, a process by which insurers group physicians based on purported quality, then offer a discount to members who only see doctors in the highest-rated tier.

The Colorado bill also spells out standards for data and how they are used, as well as asking for transparency. It says plans must use risk-adjusted data, and base grades and ratings at least in part on nationally recognized quality-of-care measures and not on cost alone. Physicians would have the right to review and appeal their ratings.

"Physicians their whole life have been graded," said Colorado Medical Society President-elect W. Ben Vernon, MD, a Denver transplant surgeon. "Getting stars is what doctors in our country are all about. We just would like those stars to be given in a way that makes sense and is correct."

The Colorado bill was based on discussions by the Physicians Advisory Council to UnitedHealthcare. The council was established by the state insurance commissioner as a condition of the United-PacifiCare merger in 2005, said CMS President David Downs, MD, an internist in Denver.