Aetna defends its use of preferred provider networks.

SAN FRANCISCO -- Speaking at the insurance industry's annual meeting, an Aetna executive defended the company's performance-based physician networks, saying that they were a way to keep costs down and to let patients know which physicians offered the best and most cost-effective care.

Dr. Gerald Bishop, who serves as senior medical director for Aetna's West division, spoke at the AHIP Institute, at a conference sponsored by America's Health Insurance Plans.

Preferred provider networks have been the subject of legal challenges across the country, most recently in Massachusetts and Connecticut. Physicians have contended that the networks use inappropriate methodology to rate their performance.

In 2007, New York Attorney General Andrew Cuomo struck a settlement with several insurers in which they agreed to publicly disclose rating methods and how much of the ratings is based on cost, and to retain an independent monitoring board to report on compliance.

Aetna was one of the first insurers to sign on to that settlement, and has continued to comply, according to Dr. Bishop.

He noted, for instance, that Aetna reviews and updates its provider list every 2 years and notifies each physician in writing if there has been any change in his or her status. Physicians have the opportunity to appeal if there is an error--before any data are made public, he said.

In addition, the company encourages physicians to submit any relevant information from medical records if they have a question about the rating.

Aetna first began developing its Aexcel network in 2002, Dr. Bishop said. The goal was to mitigate rising costs, assure patient access to specialists, and find a way to recognize the variations in costs and practices in each individual market, he said.

The company found that 12 specialties represented 70% of spending on specialists and 50% of the overall spending: cardiology, cardiothoracic surgery, gastroenterology, general surgery, neurology, neurosurgery, obstetrics/gynecology, orthopedics, otolaryngology, plastic surgery, urology, and vascular surgery.

When considering which physicians were eligible for the network, Aetna looks at the number of Aetna cases managed over a 3-year period (there was a 20-case minimum).

The company also uses nationally recognized performance measures to gauge clinical performance. Physicians who score statistically significantly below their peers are excluded.

The company also uses the Episode Treatment Group methodology to evaluate 3 years of claims for cost and utilization patterns.

A physician is considered efficient if his or her score is greater than the mean for that specialty and that market, Dr. Bishop said.

The Aexcel network now exists in 35 markets, covering 670,000 members. Aetna members in most, though not all, of those areas can log onto a secure patient Web site and see costs for various procedures and information on why his or her physician has been designated a preferred provider in the network.

Dr. Bishop said Aetna has determined that physicians in the Aexcel network typically perform 1%-8% more efficiently than their peers. Each client could save up to 4% of annual claim costs if all its covered workers used the network, he said.

Although some physicians have been unhappy with the designations, "amazingly few physicians balk at this," said Dr. Bishop.

BY ALICIA AULT

Associate Editor, Practice Trends