One afternoon, after seeing your last patient, you’re doing the old-school thing, with your feet up, opening and reading your paper mail after a hard day’s work at the dermatology ranch. You see an odd form letter – a green sticker on the outside, certified mail – stating that you have been terminated from a Medicare advantage plan, no reason given.
At first, you don’t care so much. After all, this plan pays you only 95% of Medicare. Then you think about it and realize that this plan represents 50% of all Medicare beneficiaries in your area. You start to freak out, and you immediately go to the American Academy of Dermatology website where you read Rob Portman’s article about how to fight a termination notice and respond expeditiously.
Later that night, your spouse asks why you were singled out. “Are you a bad doctor? What did you do wrong? Can the kids still go to college?
The answer, most often, is that you did nothing wrong. You’ve just been caught up in the insurer’s network management software, Optum 360.
Optum 360 is a large health care information and management subsidiary of UnitedHealthcare. It was created as a joint venture by the Optum insight (health technology) unit of UnitedHealthcare, and Dignity Health (claims processing), forming Optum 360.
Optum claims that its software measures the efficiency of providers, saving insurers money and improving the quality of care – the Valhalla of health care managers everywhere. Unfortunately, Optum doesn’t deliver this vision of heaven on earth, at least not for dermatology.
Optum 360does little more than aggregate and average the costs of individual providers with no recognition of severity of disease or case mix. The physician with the most reimbursement during an episode of care for a given ICD-9 code (now for a group of ICD-10 codes) gets credited with all the expenses under that code. For example, you do two stages of Mohs surgery on a big basal cell on the nose that you send to plastics for repair. If the reimbursement for the Mohs surgery exceeds the plastics reimbursement, the Optum software designates you as the responsible provider. The cost of the plastics repair accrues to you; the hospital OR facility charges accrue to you (facilities are not considered a provider); and the anesthesiologist charges are credited to you. In addition, the superficial basal cell carcinoma on the patient’s back, treated a week later by the referring doctor, is also attributed to you as part of the original episode of care. There are no quality parameters and no subspecialty recognition.
If your patient load regularly includes patients who have Mohs surgery, the dermatologist down the street who does Mohs only once a week looks much better to Optum than you do. The referral-only medical dermatologist in town, who treats very sick patients and routinely prescribes biologics, and (heaven forbid) intravenous immunoglobulin, is similarly tagged for termination from the insurer’s network.
So it looks as though dermatologists who handle the toughest patients lose out. But who really loses the most? The sickest patients! The dermatologist can always fill the schedule with patients with other insurance coverage and reduce the backlog or, if worse comes to worse, he can take the Canadian cure and go on vacation. The sickest patients, however, get eliminated from the system when their doctors get eliminated by UnitedHealthcare’s software. Then patients often cannot find another doctor because most insurer’s physician rosters are 70% inaccurate (JAMA Dermatol. 2014 Dec;150:1290-7).
In some circumstances, the sickest patients have reported either being unable to find other dermatologists willing to provide the special service they need or having to wait up to 6 months for an open appointment. These patients then try to drop back into fee-for-service Medicare, only to find they cannot afford the gap insurance, which costs five times as much. Why? Because those patients now have a preexisting condition. Yes, preexisting conditions still apply in the world of gap insurance.
This is obviously not optimal nor even acceptable. To quote Michael Keaton from the 1982 movie “Night Shift”: “Is this a great country or what?” The answer is a resounding “yes” for medical insurance companies who are booking record profits, but “no” for the sickest patients.
Dr. Coldiron is a past president of the American Academy of Dermatology. He is currently in private practice, but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Dr. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. Reach him at firstname.lastname@example.org.