Mid-week update

David Ermer–Uncategorized–

The FEHBlog hopes that all of his readers are enjoying the holidays. Of course, the calendar year end is a time for reflection. Healthcare Data Management reports that Aetna’s CEO Mark Bertolini has been musing about the future of the changing health insurance industry. He observed that “A new business model for insurers predicated on partnering with providers [e.g. accountable care organizations] coupled with skillful use of technology can turn the focus back on the customer. ‘We can use technology to make it easier for the consumer. Convenience is the new word for quality.’”

In a bit of a man bites dog story, the Government Accountability Office yesterday released a report recommending that CMS consider adopting certain private payer strategies to improve health care quality, which the medical industry supports:

•Private entities generally measure performance and make incentive payments at the physician-group level rather than at the individual-physician level. Physician organizations favor this approach.
•Private entities use nationally endorsed performance metrics and noted the need for a standardized set of metrics across all payers. Physician organizations concur that a standardized set of metrics would be less administratively complex.
•Most private entities in GAO’s study provide financial incentives tied to meeting absolute benchmarks–fixed performance targets–or a combination of absolute benchmarks and performance improvement. Physician organizations prefer incentives tied to absolute benchmarks over those based on how physicians perform relative to their peers. Physician organizations also favored incentives that reward improvement because baseline levels of performance vary.
•While private entities’ incentive payments vary in size and in method, private entities typically provide such payments within 7 months of the end of the performance measurement period. Physician organizations stated that financial incentives should be distributed soon after the measurement period to have the greatest effect on performance.

The AMA News provides an update on Aetna’s monetary settlement of a class action challenging its use of the Ingenix usual reasonable and customary database to price out of network claims. “The latest agreement for physicians who said they were shortchanged by a faulty database that determined out-of-network payments doesn’t cover injunctive relief with Aetna that would cover future actions, said Edith M. Kallas, an attorney for New York-based WhatleyKallas, one of the law firms prosecuting the case.” Apparently, lawyers representing medical societies sued the insurers, including Aetna, who reached an amicable settlement with the NY Attorney General in 2009 to stop using the Ingenix database.  No good deed goes unpunished.  The aggressive approach of the medical societies simply encourages payers to use Medicare’s fee schedule to price their out of network claims — a move that FEHBlog heartily endorses.