RAND study: Physician tiering program flawed

A new study by the RAND Corporation analyzing the use of physician cost profiling tools similar to those used by the Massachusetts Group Insurance Commission has concluded that the program misclassifies a significant number of the doctors profiled.

In reaching its conclusion, RAND obtained insurance claims submitted by 13,788 Massachusetts physicians to four health plans in 2004 and 2005. It analyzed the data to determine whether the profiles reliably reflected the physicians’ actual cost performance.

“The majority of physicians did not have cost profiles that met common thresholds of reliability,” according to the report.

Tiered health plan products have been adopted by several health plans across the country in an effort to encourage patients to use cost-efficient, high-quality doctors. The GIC, which purchases health insurance for state employees and other public sector employees, has required its participating health plans to implement such products since 2006.

The Massachusetts Medical Society is in litigation against the GIC and two of its participating health plans, seeking to “correct the wrongs” of its tiering program.

The RAND study, funded by the U.S. Department of Labor, the National Institutes of Health and the Robert Wood Johnson Foundation, was published in the New England Journal of Medicine