Physicians are tracked on performance measures, which are NOT to be confused with economic or efficiency profiling.
Health insurers use “economic or efficiency profiling” (which is solely financially motivated) to track and monitor doctors’ claims data to see how much each doctor is “costing the insurer” (i.e., whether the costs of the services provided by the doctor are greater than the costs expected to be provided to a patient given the patient’s demographics and health conditions).
Insurers then use that data to punish and weed out physicians who cost the insurer too much money. Insurers do this in many ways, one of which is placing the doctor on audit or special claims review. This requires the doctor to submit complete medical records and a written explanation of the services provided to each patient and for each claim/bill they submit to the insurer. This is administratively burdensome, costly, and results in delayed or denied payments. Simply put, it is punitive!
The following is a true story of my cross-examination of an insurer’s executive taken from my book, “Greed On Trial.” The exchange provides insight into the insurer’s punitive actions towards a doctor:
“And what department do you work in, Ms. Sampson?”
“I run the claims review, or SCR, unit.”
“Can you tell me what a SCR is?”
“Well, when a doctor has been flagged as ‘problematic’ in some way by one or more of the medical directors, they may be placed on SCR. This means, in short, that their billing practices are given an extra layer of review. Everything they submit is reviewed by our team before it is approved for payment.”
“And why are doctors placed on SCR?”
“To improve patient care, of course.”
[Of course I’ve found that: “To improve patient care” is the blanket justification used to explain any questionable behavior on the part of insurers and health-care systems.]
“And why was the plaintiff (doctor) placed on SCR, do you recall?”
“The plaintiff was viewed by management as not a very good doctor.”
“How do you mean?”
“Our profiling showed that this doctor did not practice like other doctors and was not providing efficient, quality care—”
“Being on SCR makes things very difficult for doctors, doesn’t it, Ms. Sampson?”
“So I’m told.”
“SCR is used as a form of punishment, isn’t it?”
“That’s your word; I wouldn’t exactly characterize it that way.”
[What I decided to do next might seem crazy at first blush, but I was setting a snare that I hoped the witness would step into, which she did.]
“Isn’t the real reason you placed my client on SCR because there had been reports to the California Department of Insurance about my client engaging in billing fraud?”
“As a matter of fact, yes, that was a major reason the doctor was placed on SCR. We were concerned about possible billing fraud.”
I displayed some e-mails I had gathered in discovery, one of which had a name highlighted on it. “Do you recognize this name, Ms. Sampson?”
“Alberta Merlini. Yes, she works for our company, Omega Health.”
I showed another e-mail. “This e-mail reveals who filed the report with the CDI. Can you read me the name of the person who filed it, please?”
“Alberta Merlini,” read the witness, her voice flat.
“So what happened here, essentially, is that an Omega employee filed a report with the California Department of Insurance, and then Omega used the fact that a report had been filed as a justification for placing my client on SCR. Isn’t that right?”
At this point, the witness’s mouth fell open and her expression said “yes”.
I pressed on. “Isn’t the real reason my client was placed on SCR because he was seen as a problem?”
“Yes, that’s right!” she replied, staring at me defiantly: “He was an outlier.”
“And by outlier, do you mean that this doctor was doing something different than the other doctors?”
“Yes, he certainly was!”
“He was doing things like making phone calls to your office appealing decisions by Omega medical directors?”
“This doctor was flaunting the guidelines!”
“Going against the rules?”
“Absolutely!”
“Whose rules?” I pushed her.
“Ours, of course!” she declared as if issuing a royal decree.
“And something needed to be done,” I said. “He needed to be punished?”
“You’re darn right he did! Rules need to be enforced, or they have no meaning!”
Amazingly, the insurer’s executive had admitted to using SCR because it is punitive.