By Ray Marano

Published September 1997

• Why physicians get deselected

• React to this article in the Discussion Forum.

Highmark Blue Cross of Western Pennsylvania, the region's largest insurer with more than a million subscribers under managed care contracts, has conceded that it is looking at possibilities to reconfigure its managed care networks and leaves little doubt that it plans to be more restrictive in admitting physicians to its managed care networks.

And there is apprehension that credentialing will be used as a tool to block physicians from health networks. "The concern that we have is that (credentialing) can be used in more nefarious ways to arbitrarily exclude physicians who are unattractive to a health network or managed care company because of the way they utilize services or their referral patterns," says David Mayernik, M.D., an oncologist who runs a large practice. "We haven't seen it happen yet, but the crunch is yet to come."

The "crunch," as Mayernik characterizes it, will come as the managed care companies begin to widen their reach for subscribers and include the riskier populations to gain market share. To cover their costs, he says, they will raise premiums and cut expenditures by limiting their provider panels to physicians who don't consume a lot of services.

Mayernik says that a network might decide to exclude a physician who is board certified in more than one specialty, for instance, because they reason that the specialist will consume a lot of resources. Or, internists who have no intention of becoming board certified in family practice may be blocked because the network wants to limit or exclude internists. He says he and many of his colleagues—particularly subspecialists—fear that even retrospective reviews of credentials could exclude or deselect physicians from health networks by looking at the number of malpractice suits or patient complaints in a physician's record, for instance, items that may not indicate anything about a physician's competence.

In part to address the credentialing issue, the American Medical Association plans to begin rolling out an accreditation plan late this year or early next year that would streamline and standardize the process of accrediting physicians. William Mahood, M.D., an AMA trustee, says Pennsylvania could be one of the first states where it is introduced. The accreditation plan would comprise five evaluation points for each practice: credentials verification using primary source verification; personal qualifications, requiring ethical behavior and documented participation in continuing medical education, peer reviews and self-assessment of performance; environment of care, which includes a practice site review of offices and medical records; clinical performance, using standardized measures of key patient care processes and comparative feedback to the physician on his/her performance; patient care results using standardized measures of clinical results, patient satisfaction and health status; and use of benchmarking data and opportunities for continuous quality improvement.

Mahood says that for physicians, the most important credentialing issues are that credentials are intact and proven to be correct, that utilization be considered in credentialing but only as it related to clinical performance and that there is an appeal process that uses an educational approach to help physicians understand how they can meet the standards.

"It's the so-called "black box" approach that troubles physicians," Mahood says. "Each plan should have a valid process and it should be known up front."

Wilma Light, M.D., a Latrobe allergist who has been active with the Pennsylvania Medical Society's efforts to streamline the credentialing process by developing a standardized application form, says she hears colleagues talk of deselection or rejection from provider panels. The biggest complaint, she says, is when physicians are rejected for "economic reasons," again, after a black box process. Light questions the validity of the data that is being used in the analysis. "I'm not sure that the box contains the information that's usable and helps them make good decisions," she says.

While for the most part hospitals are restricted in keeping physicians off their medical staffs for economic reasons, and physicians have institutional remedies available through most medical staffs' bylaws that lower the chances of being rejected at hospitals for other than unsuitable clinical performance or lack of qualifications, the situation at insurance companies is markedly different.

"It's unclear at this point what Highmark's strategy and intentions are in terms of credentialing," says Jack Krah, executive director of the Allegheny County Medical Society.

One thing, however, is quite clear to everyone: participating in a Highmark managed care network is a virtual prerequisite to practicing medicine in western Pennsylvania. As Krah puts it, "If you can't get into one of the Highmark managed care networks, you're going to have a tough time making a go of it." Krah says the medical society, which has its own credentialing service that helps simplify the process for hospitals, insurers and physicians, expects to meet this month with Highmark to get some clarification on its plans for credentialing physicians for its provider panels.

Both Highmark and HealthAmerica make physicians meet a business requirement before a determination is made regarding their suitability to serve on a provider panel. At HealthAmerica, the network development staff identifies a need for a particular kind of provider and then approaches a suitable candidate, according to Val Slayton, M.D., M.P.P., vice president of medical affairs. The candidate completes an application, which undergoes primary source verification. HealthAmerica audits the physician's practice to see if it passes muster, checking items like medical records keeping, cleanliness and office standards. If a physician fails to meet the credentialing or HMO performance standards, one of the HMO's medical directors provides the reasons in writing to the candidate. For physicians who are seeking re-credentialing, which is required every two years by the National Committee for Quality Assurance (NCQA), an accrediting body for managed care organizations, utilization and referral data are reviewed "in aggregate," Slayton says, but "it's not the information that forms the core of credentialing." Physicians who fall outside performance data participate in a corrective action process that assists them in returning to acceptable standards, according to Slayton.

At Highmark, the first determination is whether a physician is needed in the network, based on a complex formula that factors in how subscribers are distributed and the physician's specialty, practice location and hospital affiliations, says Carey Vinson, M.D., medical director at Highmark. If the physician meets those requirements, their application is sent to the credentialing department for primary source verification. If a physician's clinical credentials aren't adequate, the credentials committee will communicate the problem to the applicant. While there is no formal appeals process, the committee will reconsider new information if the applicant can supply it, such as evidence that the physician's services are needed because of some factor the committee may not have been aware of. "I don't use the term appeal," Vinson says. "They don't have a contractual arrangement with us," he says, and therefore no right to further review. Physicians don't get a detailed explanation for their rejection, Vinson says, because the large number of applications Highmark receives and processes makes it impossible to do so.

Highmark network physicians can be deselected—a process that Highmark spokesman Michael Weinstein, says is extremely rare—for "administrative non-compliance," which could be for reasons including inadequate medical records or failure to comply with referral policies dictated in the managed care agreement. Prior to termination, Weinstein says, a series of measures are taken to help the physician comply. In the event of termination, a physician can appeal with additional information to Highmark. The post-termination review process is characterized by Weinstein as "less formal" than that prescribed for correcting administrative non-compliance.

Vinson says that a rush of physicians to join its managed care networks, because of an influx of new physicians into the region, practice mergers and acquisitions of practices by hospitals, and preparation for an NCQA review this spring which required recredentialing of all Highmark physicians, have created a clog in the system and slowed the process of accrediting physicians for participation in its panels. Those factors are combined with the emerging reality for physicians that near-automatic admission to Highmark's provider panels based purely on professional qualifications has become a thing of the past.

Vinson also says that the rate of rejection of physicians for admission to its networks has changed little, although he adds that there have been some limits on new practices being admitted since 1995 in Allegheny and other counties since last year. Highmark reviews its distribution of physicians quarterly by ZIP code, he explains, to ensure that there is adequate coverage for its subscribers. "We believe we have, in most cases, enough practitioners to serve our membership," Vinson says, and adds that there are approximately 7,500 physicians in the Highmark managed care networks, up from about 1,500 in 1991.

"We’ve got one of the highest volumes per capita of providers," says Vinson, who notes that the process of credentialing and re-credentialing consumes a great deal of the company’s money and staff resources. "Looking at the number of doctors we have per mileage, county, ratio of practitioners to subscribers—no one disagrees that we have sufficient volume for our customers. If we find out we’re not providing needed services, we’ll take steps to change that," Vinson says. "Ultimately, it becomes a business decision," he adds. "We can’t make decisions based on whether all physicians can get on our panels."

A worst-case scenario for physicians in western Pennsylvania who can’t get credentialed by Highmark, Vinson believes, is that 32 percent of the privately insured market would be shut out from them. The more likely impact would be more modest, Vinson adds, given the high proportion of Medicare and Medicaid patients typically seen by physicians in the region. "We don’t think it is valid that a physician who can’t see Highmark patients is dead. If they’re shut out of 20 percent [of available patients], it may not be comfortable, but they’re not doomed," Vinson adds.

Highmark's indication that it plans to put together restricted provider networks, however, is fueling speculation that the lag in admitting physicians to the network is connected to that effort. And one source in the physician community said they believed that Highmark is taking a breather until it determines how it is going to reform its networks and choose physicians for its panels.

There seems to be little in terms of pending legislation that would help physicians if they are deselected or denied credentials by an insurer, although the PMS is seeking legislation that would deal with network selection, says Don McCoy, PMS director of regulatory affairs. He says the PMS is looking for legislation with provisions that would include oversight by the state health and insurance departments; a uniform selection process; due process rights for physicians. Matt Campion, a legislative aide for state Sen. Tim Murphy, R-37th Senatorial District, said one piece of legislation sponsored by Murphy, would prevent a physician from being removed from an insurance panel simply because they advocated on behalf of a patient to provide treatment that the insurer didn't deem necessary. But Campion said he is unaware of any other pending legislation that addresses physicians' rights.

Alan Axelson, M.D., president of the Allegheny County Medical Society, said he believes organized medicine would support physicians' efforts to redress grievances against insurer deselection. But Axelson acknowledged that organized medicine is still attempting to fashion a decisive response.

Deborah Robinson, Esq. of Pittsburgh’s Houston Harbaugh suggests that physicians be wary of "without cause" clauses in their contracts with health insurers and review any anticipated change in their practice in the context of how it could affect their standing with an insurer. Insurer-contracted physicians can address grievances through legal channels according to their contract rights, says Robinson.

Physicians who wish to get on an insurer’s panel and are rejected—even if they are otherwise qualified—have no legal recourse at the present time, says Robinson. "In the absence of ‘any willing provider’ legislation, an insurance company is under no obligation to offer any contract to any provider at all," she says, adding that physicians without contracts with a given insurer have not had successful legal recourse in trying to get on that insurer’s panel.