The Wall Street Journal

Doctor groups criticized growing efforts by health plans to steer patients toward certain physicians based on cost or quality, arguing in a letter to insurers that the rankings may be unreliable and unfair.

The letter, sent by several organizations including the American Medical Association, is the latest shot by doctors at such grading efforts, which have led to years of tensions between physicians and health plans. Insurers, for their part, said they are already working with doctors to ensure their ratings are accurate and transparent.

Insurers have long charged patients greater out-of-pocket fees when they see doctors who are not in the health plan's network of contracted physicians. Now, insurers and employers are taking this a step further by dividing doctors into tiers based on factors such as quality and cost. For example, doctors deemed to be more efficient than average, perhaps because they order fewer questionable imaging scans, might rank in a higher tier. Performance, including favorable patient outcomes, also could boost a doctor's rating.

In such "tiered," or "limited," network setups, consumers may get lower out- of-pocket charges if they see a doctor in a preferred ranking. Patients would typically pay more out of pocket to see doctors who are ranked lower. At the most extreme, consumers may have to pay the full cost of seeing a physician who doesn't make the favorable list.

In the letter, sent to major insurers, the doctor groups argued that recent research from Rand Corp. showed that the health-plan rankings are unreliable. They highlighted a study published in March in the New England Journal of Medicine that used claims data from four health plans in Massachusetts. It found that a two-tiered rating based on costs would incorrectly classify an estimated 22% of doctors.

"Physicians' reputations are being unfairly tarnished using unscientific methodologies and calculations," the letter said. The doctor groups asked the insurers to work with them to re-evaluate their ranking programs.

An AMA spokesman said the group had provided some funding for one of the three relevant Rand studies, but was not the primary source.

"There are serious flaws in health insurers' programs to try to rate individual physicians," said Cecil Wilson, president of the AMA, who said the group feels the rankings shouldn't be primarily focused on costs.