Washington doctors, health plan agree on network structure

The deal requires Regence to explain its methods for measuring quality performance and gives physicians input in the process.

By Amy Lynn Sorrel, AMNews staff. Aug. 27, 2007.

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As Regence BlueShield develops a performance-based network, Washington physicians will have their say in how it works thanks to a recent settlement with the health plan.

In a deal reached this month with the Washington State Medical Assn., the AMA/State Medical Societies Litigation Center and six individual plaintiff doctors, Regence agreed to include state doctors in the process before implementing a new network that grades physicians based on quality and cost efficiency. The insurer also made an undisclosed financial contribution to the WSMA Education and Research Foundation for projects to educate doctors on performance measurement issues and promote quality improvement programs in physicians' offices.

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WSMA President W. Hugh Maloney Jr., MD, described quality programs like the one Regence proposed as "new territory" in which physicians' input is critical.

With the settlement, "we are going to be able to work collaboratively into the future, when possible, on similar issues that will put in place a mechanism that is going to advance transparency for the benefit of consumers and for our members to help them make better informed health care choices," Dr. Maloney said.

The agreement expires in two years. But it sets the stage for ongoing cooperation, Dr. Maloney said.

The AMA also praised the settlement in a joint statement with WSMA and Regence.

Regence officials, in a separate statement, said they were pleased with the resolution and seek to "better understand physician[s'] concerns" in their discussion of performance measurement. Regence made the financial contribution as part of their collaboration with WSMA, the statement read.

The settlement resolves a lawsuit that physicians filed against Regence in September 2006 to stop its Select Network, saying the health plan used methods that unfairly rated and excluded doctors based on inaccurate claims data. Doctors also said the insurer defamed them when it sent letters to patients saying their physicians didn't make the cut to be part of the plan. About 500 doctors were excluded from the network set up for 8,000 patients who are members of the Society of Professional Engineering Employees in Aerospace.

The AMA joined the suit in December 2006. That month, Regence dropped the performance-based network for an indefinite period. The company had previously apologized to physicians and patients for any miscommunication caused by the letters.

Among the settlement provisions, Regence agreed to:

• Explain to doctors its methodology before implementing any new or revised performance program.
• Seek input from the WSMA in a number of areas, including timeliness of data, comparability of physician practices and methods for communicating grades to doctors.
• Notify doctors at least 10 days before releasing new performance scores.
• Post physician scores and reports on its Web site with explanations of the results.
• Give doctors a chance to appeal their scores in a timely manner before they go public, first through an internal review process.