BILL ANALYSIS
AB 2533
Page 1
Date of Hearing: April 6, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2533 (Fuentes) - As Introduced: February 19, 2010
SUBJECT : Health care coverage: quality rating.
SUMMARY : Revises current law that requires health care service
plans and health insurers (collectively carriers) to submit a
description of their policies and procedures related to
"economic profiling" as defined, to the Department of Managed
Health Care and the California Department of Insurance
respectively, to include policies and procedures on "quality
rating." Specifically, this bill :
1)Requires, on or after July 1, 2011, and in addition to current
reporting requirements related to economic profiling policies
and procedures, carriers to submit a description of their
policies and procedures related to "quality rating" to state
regulators.
2)Defines "quality rating" as any efforts by a carrier or by an
entity contracted by a carrier to develop, evaluate, rate, or
designate individual or group performance of physicians based
on quality measurements and claims data.
3)Revises current law to require the filing to also describe how
the policies and procedures are used in network modification
and patient screening. Requires the filing to indicate how
the economic profiling or quality rating system being used by
the carrier takes into consideration risk adjustments that
reflect the accuracy and reliability of data and patient
compliance with a recommended procedure.
EXISTING LAW :
1)Defines "economic profiling" as any evaluation of a particular
physician, provider, medical group, or individual practice
association based in whole or in part on the economic costs or
utilization of services associated with medical care provided
or authorized by the physician, provider, medical group, or
individual practice association.
2)Requires carriers to file with regulators a description of any
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policies and procedures related to economic profiling utilized
by the plan and its medical groups and individual practice
associations. Requires the filing to:
a) Describe how the policies and procedures are used in
utilization review, peer review, incentive and penalty
programs, and in provider retention and termination
decisions; and,
b) Indicate in what manner, if any, the economic profiling
system being used takes into consideration risk adjustments
that reflect case mix, type and severity of patient
illness, age of patients, and other enrollee
characteristics that may account for higher or lower than
expected costs or utilization of services.
3)Requires changes to the policies and procedures to be filed
with regulators.
4)Requires carriers that use economic profiling to provide a
copy of economic profiling information related to profiled
providers upon request.
5)Requires carriers to require, as a condition of contract, that
its medical groups and individual practice associations that
maintain economic profiles of individual providers shall, upon
request, provide a copy of individual economic profiling
information to the individual providers who are profiled.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, many insurers
are attempting to rate physicians based on quality or costs
measures without the consent of physicians. For example, the
California Physician Performance Initiative (CPPI) is a
physician rating project based on national quality measures.
The author writes that CPPI has mainly focused on measuring
primary care physicians and internists, but it continues to
expand to other specialties, such as cardiologists,
endocrinologists, pulmonologists, gastroenterologists, and
rheumatologists. The author states that quality or physician
rating programs, such as the CPPI, are fraught with multiple
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problems, including incompleteness of claims data, statistical
validity of patient sample size, and the likelihood of
misleading patients due to inaccurate information.
2)PHYSICIAN COST PROFILING . According to a March 2010 New
England Journal of Medicine article regarding physician cost
profiling, health care purchasers are experimenting with a
variety of ways to control costs; several of which involve
physicians, since they often write the orders that drive
spending. Towards that end, health plans have limited the
number of physicians who receive in-network contracts,
offering patients differential copayments to encourage them to
visit "high-performance physicians" (i.e., those providing
higher-quality, lower-cost services), paying bonuses to
physicians whose patterns of resource use are lower than
average, and publicly reporting the relative costs of
physicians' services.
Researchers from RAND, the University of Pittsburgh School of
Medicine, and the University of Southern Maine, Portland
examined claims data from four health plans in Massachusetts
to analyze programs offering incentives to choose physicians
classified as offering "lower-cost care." The stated intent
was to evaluate the reliability of current methods of
physician cost profiling. The researchers found that overall,
the majority of physicians did not have cost profiles that met
common thresholds of reliability. For example, 43% of all
physicians sampled (across specialties) were misclassified as
lower cost, which suggested to the researchers that there are
serious threats to health plans' abilities to achieve
cost-control objectives and to patient expectations of
receiving lower-cost care when they change physicians for that
purpose. The researchers concluded that "Current methods for
profiling physicians with respect to costs of services may
produce misleading results."
3)PATIENT CHARTER . In 2007, the New York State Attorney General
commenced an industry-wide investigation into insurers'
"doctor-ranking" programs. As a result, settlement agreements
were reached with several health insurance companies, and out
of those agreements the Patient Charter for Physician
Performance Measurement, Reporting and Tiering Programs
(Patient Charter) was created. The Patient Charter, which is
endorsed by the AARP, the National Partnership for Women &
Families, the AFL-CIO, the Leapfrog Group, Pacific Business
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Group on Health, the National Business Coalition, and several
physician groups (including the American Medical Association)
creates a national set of principles to guide measuring and
reporting to consumers about doctors' performance. According
to the Consumer-Purchaser Disclosure Project, an initiative
funded by the Robert Woods Johnson Foundation, health plans
that adopt the Patient Charter agree to:
a) Retain, at their own expense, the services of a
nationally-recognized, independent health care quality
standard-setting organization to review the plan's programs
for consumers that measure, report, and tier physicians
based on their performance. This review should include a
comparison to national standards and a report detailing the
measures and methodologies used by the health plan; and,
b) Adhere to the specified criteria for physician
performance measurement, reporting and tiering and make
this adherence known to their enrollees and the public.
As of March 10, 2010 six plans had committed to fulfilling the
Patient Charter: Aetna, Blue Cross Blue Shield of Tennessee,
Blue Shield of California, Cigna, UnitedHealthcare, and
Wellpoint.
4)CALIFORNIA PHYSICIAN PERFORMANCE INITIATIVE . According to the
CPPI Web site, the initiative began in 2006 to measure and
report the quality of patient care that is provided by
individual physicians in California. The project is
administered by the California Cooperative Health Care
Reporting Initiative, a group that collaborates on quality
issues, and whose members include employer, consumer, health
plan, and physician groups. Start-up funding for CPPI was
provided by the federal Centers for Medicare and Medicaid
Services, the California HealthCare Foundation (CHCF), the
Pacific Business Group on Health, and the pharmaceutical
company Merck. According to CHCF, this multi-stakeholder
initiative is investigating how California physicians stack up
against benchmarks and whether care provided to Medicare
beneficiaries varies against other payers. CPPI's goal is to
improve patient care and affordability by:
a) Reporting results to physicians to help them gauge how
well care for their patients meets national standards of
care;
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b) Applying the performance results in ways to help
consumers and purchasers get better value when they choose
and use health care; and,
c) Adopting performance measures and reporting methods
using the best available science to set performance
standards.
CPPI assessed physician performance using clinical quality
measures that are evidence-based and endorsed by national
standard-setting bodies (the National Quality Forum and the
American Medical Association's Physician Consortium on
Performance Improvement). According to CPPI, the measures for
2008 and 2009 were related to preventive care and chronic
condition management. For 2008 data, individual reports were
sent to over 13,000 physicians for their review and correction
over an eight-week period. Based on that review by
physicians, a number of errors in the data were identified.
Results were not released publicly, and a November 2008
briefing on CPPI by one of the partners noted that data
improvements were needed in the project moving forward.
5)PREVIOUS LEGISLATION . SB 1300 (Corbett) of 2007 would have
prohibited a contract between a health care provider and a
health plan from containing a provision that restricts the
ability of the health plan to furnish information on the cost
of procedures or health care quality information to plan
enrollees. SB 1300 failed passage on the Senate Floor.
SB 984 (Rosenthal), Chapter 893, Statutes of 1998,requires
carriers to file with regulators a description of any economic
profiling and associated policies and procedures employed by
the health plan, its medical groups, and individual practice
associations.
6)SUPPORT . The California Medical Association (CMA), the
sponsor of this bill, writes that many insurers and plans, and
other third party entities, are conducting physician quality
ratings without the knowledge or consent of physicians. CMA
states that given that there are many concerns about the
accuracy of the claims data used by insurers, and the
irreparable harm such ratings may bring to a physician's
personal and professional reputation or how patients could be
mislead by the information, it believes that health plans,
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insurers, or any third party contracted to conduct a quality
rating program should be required to simply disclose a
description of the policies and procedures related to the
rating.
7)SUPPORT IF AMENDED . The California Chiropractic Association
(CCA) supports the concept of this bill, but seeks an
amendment to make the bill apply to all health care providers,
not just physicians. CCA writes that the term "physician"
generally means a physician as defined by the Medical Practice
Act excludes other types of health care providers, many of
whom are concerned by the use of quality ratings by insurers.
REGISTERED SUPPORT / OPPOSITION :
Support
California Medical Association (sponsor)
American Congress of Obstetricians and Gynecologists, District
IX
California Chiropractic Association (if amended)
Opposition
None on file.
Analysis Prepared by : Melanie Moreno / HEALTH / (916)
319-2097