‘Tier-2 provider’ classification appears arbitrary, unfair

In the past, while on the endocrine consult service, I supervised my fair share of inpatient diabetes care and personally followed many of these patients in my clinic. More recently, I redefined my focus — I now follow my primary interest in general endocrinology and thyroid disease, including an enhanced practice in fine-needle aspiration of the thyroid and the administration of therapeutic I-131.

I am not expected to follow patients with diabetes, as our colleagues in the neighboring diabetes center have this covered from an inpatient and outpatient perspective. So the bottom line is that I cannot recall using the 250.xx codes for services rendered in any patient encounters in the past 2.5 years.

James V. Hennessey

Last year, I received notification from one of the third-party insurers in our area that they were obligated to rate the “providers” in their network to provide “quality” for their beneficiaries. Because I was new to the area, I was assigned the designation of “tier-2 provider,” as they had insufficient data to award me a “tier-1” designation and too little information to condemn me to “tier 3.”

The form letter informed me that although there would be no effect on my reimbursement rates as a result of this tier assignment at that time, the patients who were followed in my practice would be required to pay the tier-2 co-payment, higher than their lowest (tier 1) payment. I was reassured that this was not as high as the maximum co-pay expected if they had saddled me with the tier-3 designation.

I was a bit upset that someone without any information on my practice would be empowered to arbitrarily assign me to such a classification. It was disturbing that patients might make their choice of physician based on the co-pay, as they frequently do in the pharmacy. I was most concerned to learn that patients would be led to believe that the tier assignments were reflective of the quality of medical care they would receive, what the insurers called a “quality assessment program.” My colleagues told me that protesting was fruitless, and I should not waste my time — so I moved on.

Rating assignment

This year, I received my “quality program rating assignment” letter based on 2009 data. The form letter again indicated that this process was required by the state of six plans that were somehow overseen by the Group Insurance Commission (GIC), and the process of assigning the rating was developed by a biostatistician from a name brand medical school, not our school.

The message was that the formula for deriving the “quality ratings” was apparently scientifically based; all conclusions were inherently legitimate and far to complex for me to understand, and I should just skip down to my tier assignment and move on. Again, I was reassured that my reimbursement was not currently at risk, but my patients would be assessed their visit co-pay based upon my rating.

This time, there was a limited outline of personal practice performance data with an admonition that these were pooled data derived from the input of all of the participating plans in this assessment of the quality of my practice. I read further, and under the title of “quality measures” was a table with four measures of diabetes care, including documentation that HbA1c, urine microalbumin, serum lipids and prescription of statins that had been billed to the insurers. I am proud to report that 100% of my patients with diabetes had the first two quality measures billed to the insurers, about 75% had their urine metabolism checked and 50% were on statins. This resulted in a 90% quality rating, which was translated into a “B” (not “A”) quality rating.

At first, I was thankful to get the 90% rating (used to be an “A” when I was tracking such things). Then I thought, “Why the ‘B’ grade,” and “Who are these diabetics?” Were they the patients of my colleagues from the diabetes center for whom I had provided fine-needle aspiration or I-131 services? Who were these patients who were costing me my “A” (100%) rating and for whom I had never submitted a 250.xx code? However, this was not my tier assignment, only the “quality rating.” I thought the tier assignment must be based on data better than that.

Well, the “economic efficiency assessment” was next. This was broken down into two sections. The first section seemed to indicate that I was fiscally more efficient in managing such common problems as hypoparathyroidism. This resulted in a small positive balance on my ledger. The next section was labeled “unfavorable economic outcomes.” Leading this list was the diagnosis “hyperthyroidism,” in which I was awarded a rating of more than $1,000 per episode of care, followed by the designation of nodular goiter, in which again my rating was also high compared with my peers.

Confusion sets in

How could this be? Who were these peers? On second thought, the concentration of hyperthyroid and goiter patients likely were linked to the one-time referrals I often see at the request of my colleagues for I-131 or fine-needle aspiration. Missing were the legions of hypothyroid and thyroid cancer patients who dominate my schedule. I thought I was efficient in my management of these patients, and if anyone were to measure real quality, I might be a star.

After calling the insurer, I was told that it was necessary for me to speak with the provider relations director, and it was appropriate for me to be considered a provider, as this was the term used in the contract that someone in our multispecialty group had negotiated. At the time of the call, there were apparently no data available to explain any of my questions. I was encouraged to outline my thoughts in writing.

So I typed my questions about credit for the care of the diabetic patients, the hyperthyroid and goiter patients referred for I-131 or fine-needle aspiration services. I suggested that perhaps my activity should be compared with my real “peers” (radiologists) for these procedural charges. I also outlined my confusion on the relative cost-effectiveness for a few other diagnoses (breast masses and irritable bowel syndrome) that I could not recall coding for and could not imagine that there were endocrinologist bench marks for these random, primary care codes.

Thus far, only one of the associate medical directors has responded. I was informed that “all endocrinologists were rated on diabetes care, as it is core to the field.” I was reminded that “the quality measures for endocrinologists are based on nationally recognized measures” and that it was “assumed that an endocrinologist would check basic care for conditions that are treated by endocrinologists or trust the physicians who make referrals. We do not publish any actual scores.”

Inadequate methodology

So the bottom line is that they do not have anything else to measure my quality. They only have a hammer, and my practice looks like a nail to them. Of course, that is not high science and clearly is inadequate methodology to be employed in such an important assessment. The response went on to acknowledge that my ratings were high (expensive), as I do consults (imagine that), bill at other than the two and three level on follow-ups and seem to utilize ultrasound and fine-needle aspiration codes. Further, there was an explanation of the single episodes of general medicine and primary care codes I was reassured that, as the episodes of primary care diagnoses were infrequent, the effect on my overall rating was minimal. Finally, I was assured that the scoring provided by the GIC and some intermediary led to my rating at the two level.

The next day, I received another e-mail informing me that it was possible to designate my practice as “not tiered” with a level two co-pay. Copied on this last e-mail was apparently a plan administrator who was instructed to assign me as “2 not tiered.”

Shortly after this notice, I received information from our group that the State Medical Society was working on our behalf to litigate this process, and that at least three of the plans were solely using cost data for tier assignment, as sufficient quality data was lacking. Apparently, as our group had some favorable contracts with the GIC overseen companies, our cost data were inflated and not a true reflection of our economic efficiency.

I am now exhausted. This process has successfully dissipated my dissatisfaction with the “quality” process and these results. I am almost resigned to the fact that I will not further protest this ridiculous rating. I continue to be disappointed with the fact that patients will equate my rating with the concept of “less than great,” even though the official rating at level two is “good.”

I am reassured that our group and the State Medical Society seem to be standing up to this process and hope that more rational processes can be developed to serve the potentially noble purpose that is espoused. I am concerned that the apparent “lesser cost of care” associated with my rating benefits primarily the insurance company but not necessarily my patients. At this point, all I can do is accept my fate, although I am not sure I want to explain to anyone why I am only good and not “top tier.”

As I reflect on all of these concepts, I get the impression that this was a way for the insurers to express their displeasure with the cost of care imbedded in their contracts with larger academic groups and use this to drive the system in their favor by encouraging patients to choose lower-cost physicians who may have not been able to negotiate reasonable contracts with the insurers as individuals. It seems clear that if we, as physicians, are divided, we are vulnerable to this type of manipulation by insurers, as there is no strength in the No. 1.

James V. Hennessey, MD, is an Associate Professor of Medicine at Harvard Medical School in the Division of Endocrinology, Beth Israel Deaconess Medical Center, Boston.