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New Analysis Underscores Legality of Physician Ranking and Public Reporting Systems When Used by Health Insurers to Improve Health Care Quality

Key Success Factors Include Openness of Process and Standards Development,

Clear Method to Identify and Correct Errors

WASHINGTON, Oct. 9 /PRNewswire-USNewswire/ -- A legal analysis released today by The George Washington University School of Public Health and Health Services (GW) and the Robert Wood Johnson Foundation (RWJF) affirms the legality under federal and state law of physician ranking systems used by health plan provider networks. Recent efforts by health plans to measure and disclose physician performance on quality and efficiency have created a backlash, with some questioning whether such practices are legal.

Funded by RWJF and conducted by a team of GW researchers, the analysis examines the principal legal allegations that might be raised against the practice of tiering physicians in networks based on quality and efficiency measures. The analysis concludes that well-designed tiering arrangements pass legal muster.

"The GW analysis demonstrates that, done properly, physician rankings should not raise legal concerns, either for those who are pushing the standards, or those being measured," said Michael W. Painter, MD, JD, senior program officer for the Robert Wood Johnson Foundation. "Physician rankings are a critical component of the broader movement to measure and publicly report on physician and hospital performance to help improve the quality and value of health care Americans receive."

The analysis comes at a time when an increasing number of health care plans are creating tiers that rank physicians' performance by the quality and effectiveness of their care. State-level criticisms of physician-tiering arrangements have recently emerged. In August 2007, New York Attorney General Andrew Cuomo wrote letters to various insurers objecting to a physician ranking program and requesting that the tiering system be justified. Also in August, Regence BlueShield and the Washington State Medical Association (WSMA) settled a lawsuit brought by the doctors, who objected to the rating process. A July 2007 lawsuit, filed in Connecticut, by the Fairfield County Medical Association, charged several insurers with violations of state unfair trade laws because of the use of "elite" physician designation programs.

Ensuring the legality of public reporting is critical because many experts believe that the public needs significantly more information about the quality and cost of care in order to drive improvements in the quality and efficiency of health care. For instance, state and community alliances across the nation, such as those participating in the RWJF project Aligning Forces for Quality: The Regional Market Project or those working with the Department of Health and Human Services, are using quality measures and publicly reporting them in an effort to lift the quality of care. A growing number of health plans rate physicians on certain quality and efficiency measures to design insurance products that classify physicians in tiers. Additionally, plan members are given incentives to select certain high performing physicians.

The GW legal analysis concludes that transparency is critical when designing a tiering process. The analysis notes that the Washington state settlement, which established a process to include physicians in the rating process, illustrates the premium the legal system places on action that "is visible to affected populations and allows their input."

"Classifying doctors based on the quality and efficiency of their services is legal, and so is publishing information regarding health care quality," said lead author Sara Rosenbaum, JD, Hirsh Professor of Health Law and Policy and chair of the Department of Health Policy at the GW School of Public Health and Health Services. "It is undertaking these efforts in the dark that can lead to a legal backlash."

The analysis further notes that transparent standards, a transparent development process in setting tiers and assigning individual physicians to tiers, and a clear and accessible process for identifying and correcting errors that arise as tiering positions should ensure the legal soundness of these systems.

The analysis suggests that standards could be developed by state insurance regulators in the case of insured plans, the Centers for Medicare and Medicaid Services in the case of Medicare and Medicaid plans, and by the United States Department of Labor in the case of ERISA-governed plans. A full copy of the study can be found at

The Health Law Information Project, funded by the Robert Wood Johnson Foundation, is a special initiative whose mission is to examine and report on the interaction between the law and health information in a changing health care system. With a home in the Department of Health Policy at The George Washington University School of Public Health and Health Services, the Project, working under the guidance of a standing committee, will produce both brief and extended analyses of emerging issues in health information law; present balanced options and legal tools for addressing perceived legal barriers to the responsible use of health information to improve quality and reduce health care disparities; and respond to requests for technical support on critical questions in health information law.

The George Washington University Medical Center is an internationally recognized interdisciplinary academic health center that has consistently provided high-quality medical care in the Washington, DC, metropolitan area for 176 years. The Medical Center comprises the School of Medicine and Health Sciences, the 11th oldest medical school in the country; the School of Public Health and Health Services, the only such school in the nation's capital; GW Hospital, jointly owned and operated by a partnership between The George Washington University and a subsidiary of Universal Health Services, Inc.; and the GW Medical Faculty Associates, an independent faculty practice plan.

The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 30 years, the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. By helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in our lifetime.

SOURCE Robert Wood Johnson Foundation; George WashingtonUniversity School
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