Insurance companies are paring down plans for patients, impacting patient ability to choose physicians. Dermatologists are being terminated from some plans based on practice profiling software that has insufficient risk analysis.
While one of the goals of President Obama's Patient Protection and Affordable Care Act is to increase accessibility to medical care for Americans who are uninsured and have no healthcare coverage, insured Americans who have been contributing to their insurance plans for years are finding that their plans have been pared down by their insurance companies.
As a result, patients with Medicare Advantage in particular have dwindling options when it comes to choosing a physician. A vast number of physicians, including specialized dermatologists, have been informed that they are being terminated from these plans even though many of them have long-standing relationships with patients who purchased Medicare Advantage plans.
"Carriers in the Medicare Advantage Space are pruning their network, and, in essence, they are looking at costs," says Brent Moody, M.D., a Mohs surgeon with Heritage Medical Associates in Nashville, Tenn., chairman of the public policy committee for the American College of Mohs Surgery, and member of the healthcare finance committee for the American Academy of Dermatology (AAD).
"They are eliminating who they perceive are the most expensive physicians. In many cases, it is Mohs surgeons (who are being terminated)."
The decisions that insurance carriers are rendering to terminate dermatologists are based on insufficient data, says Dr. Moody. "Carriers hire third-party vendors to provide the data, but the third-party vendors do not risk-adjust the data in a meaningful way," he explains.
The data do not, for example, account for the severity of presentation of a skin cancer and indicated treatment. "It is viewed the same way, whether it is a deeply invasive squamous cell cancer in a patient's orbit or a superficial basal cell carcinoma on their back," points out Dr. Moody. He says that the data do not take into account that “the physicians treating more complex problems are using more resources because the cancer demands that."
The impact of these decisions forces patients to change insurance carriers, seek care from other physicians who remain part of the insurance network, or simply not seek care.
"If you have an ongoing relationship with a physician, and the physician is removed from the panel, then it boils down to the patient switching doctors or switching insurance, both of which are disruptive," says Dr. Moody. "The ultimate concern is if patients choose to forego necessary care."
It is worth noting that dermatologists are not the only specialists who are casualties of narrowing networks, points out Howard Rogers, M.D., Ph.D., chairman of the Private Sector Taskforce for the American College of Mohs Surgery and a Mohs surgeon in Norwich, Conn., a state that has been hit hard by this phenomenon.
"It's not just dermatologists (who are being targeted)," says Dr. Rogers. "Cardiologists, other specialists, and sub-specialists have been cut."
In 2013, United Healthcare sent termination notices to over 2,000 physicians of all specialties from their provider networks in Connecticut.
When insurance carriers issue termination notices to dermatologists, the notice indicates that the decision will take effect in three months, and that dermatologists have 30 days to appeal the decision to terminate them.
Dr. Rogers explains that the practice profiling software used by insurance carriers generates an average cost per skin cancer treated, so clinicians who generate costs that appear significantly higher than the average are unjustly targeted by insurers.
"They are taking people who cost them the most per skin cancer and taking them out of the network," says Dr. Rogers. "They are not looking at how the patients are being treated. They are treating large, aggressive cancers with a lot of treatment, surgery, or a lot of resources."
Dermatologists have the opportunity to fight their terminations, but the deck is stacked against them because the participation agreement with insurers states that a physician may be terminated without cause. When a physician appeals a termination, insurance carriers maintain the network terminations meet the contractual obligations of the agreement, so the appeal is typically denied, explains Dr. Rogers.
David Pharis, M.D., a Mohs surgeon in Atlanta, Ga., received his first termination notice from Humana Inc. in the spring of 2013 and was successful in his appeal of the decision. He subsequently received another termination notice in 2014 alerting him that termination was to take effect December 31, 2014.
"I formally objected, but the termination was upheld this time," says Dr. Pharis.
Like other Mohs surgeons, Dr. Pharis realized that his outcomes in care were being unfairly compared to general dermatologists who were largely seeing uncomplicated cases and thus producing less cost to insurers.
The rejection of his appeal spurred Dr. Pharis into political activism, encouraging his patients to write to their congressional representative about what had happened to their insurance plans and how Dr. Pharis was scheduled to be out of the healthcare equation for his patients. To add insult to injury, Dr. Pharis' patients informed him that the Centers for Medicare and Medicaid Services had mailed them letters indicating that Dr. Pharis opted to end his contract with Humana.
"They lied to my patients," declares Dr. Pharis. "That got my ire up. I brought this to the attention of the AAD leadership. At this point, I understood that this was a process that was happening across the country, and I was getting swept up in it."
Many clinicians agree that one of the probable impacts from this narrowing of markets is that many patients will opt to go untreated or will be treated with a modality that is far less effective, predisposing patients to recurrence down the road.
George Hruza adds that patients will likely be inconvenienced by having to go far afield for dermatological care. Dr. Hruza is clinical professor of Dermatology at St. Louis University, Director of the Laser & Dermatologic Surgery Center in Chesterfield, Mo., and President of the American Society for Dermatologic Surgery.
"With more than two-thirds of independent private practice dermatologists in the St. Louis region terminated by one Medicare Advantage plan, patients will have longer waits [for care]," says Dr. Hruza in an interview. "Patients may have to travel long distances to find a dermatologist who will see them."
AAD president Brett Coldiron, M.D., a Mohs surgeon in Cincinnati, Ohio and Clinical Associate Professor at the University of Cincinnati, puts forth that cuts to Medicare Advantage plans resulted in insurers eliminating their most expensive patients by eliminating the doctors who treat them from their network. Despite the fact their government reimbursement has declined from 114% to 104% of fee for service Medicare, the overall profit margin of insurers has increased. Rather than have their profit margin affected, insurance carriers have de-listed the services of more specialized dermatologists like high volume biologic drug prescribers and Mohs surgeons, contends Dr. Coldiron. He adds that this is a move that is short-sighted if they are motivated by cost savings.
"In the long run, they will not save money," he explains. "They are de-listing physicians for treating the sickest patients. Delayed care means greater risk of mortality and more expensive care later on. What does it cost to treat someone with metastatic melanoma [compared to melanoma that has not metastasized]?"
Moreover, even though insurers compile network directories to list available dermatologists, those directories are not reliable. A recent study1 found a 75% error rate in these directories. In addition, many of the dermatologists listed were duplicates, had incorrect contact information, were deceased, retired, were relocated, or were not accepting new patients.
One of the distressing realities of this de-listing phenomenon is that patients who will be most affected are retirees, typically over 65 years of age, who have been making Medicare contributions throughout their working years, according to Dr. Coldiron.
Dr. Pharis and Dr. Rogers reported no disclosures. Dr. Hruza and Dr. Moody reported no relevant conflicts.
Resneck JS, Quiggle A, Liu M, Brewster DW. The accuracy of dermatology network physician directories posted by Medicare Advantage health plans in an era of narrow networks. JAMA Dermatol. 2014;150(12):1290-7.