Regence sued over ratings that cut 500 doctors

The Washington State Medical Association and six doctors are suing Regence Blue Shield, saying the insurer's flawed and unfair quality and efficiency ratings damaged their reputations.

The lawsuit arose after Regence this spring informed 6,000 to 8,000 Boeing employees and their families it would no longer pay for them to see their doctors because their "quality and efficiency" didn't meet the standards of a new "performance-based" health plan called the Select Network Plan. That led to an outcry by patients and many of the 500 doctors excluded from the plan, and a demand for an apology by the WSMA.

The plan had been developed in response to negotiations by Boeing's Society of Professional Engineering Employees in Aerospace (SPEEA), but union representatives joined in the furor, saying they hadn't realized that thousands of employees and family members would lose their doctors.

Regence postponed the plan until July 2007 and sent a letter to union members apologizing for the "misunderstanding." The company said a bad rating did not imply that their doctor didn't meet the "standard of care" in the community.

After the doctors and patients complained, Regence President Mary McWilliams said the insurer realized its rating system, based wholly on billing data, was "not a perfect science." But, she said, employers were demanding higher quality and efficiency in health care.

The lawsuit, to be filed today, seeks to bar Regence from implementing the program and asks for damages for "improper and inaccurate statements" to patients about their doctors, said Jennifer Hanscom, spokeswoman for the WSMA. "We feel that's libel."

The lawsuit also alleges Regence violated the state's Consumer Protection Act.

Dr. Jeff Robertson, chief medical officer for Regence, said he was surprised and disappointed that the medical association and the doctors chose to sue "rather than continue to work with us to improve the methodology."

Regence had taken the doctors' criticisms "very much to heart," Robertson said. Not only did Regence ask doctors to bring them "data anomalies," he said, it agreed they should have time to improve, rather than simply being barred.

One of the doctors suing Regence, Dr. Michael Schiesser, a Bellevue internist, said he took a closer look at Regence's data after he was not included in the new network.

But this spring, he was told he had placed in the bottom 12 percent, and would not be included in the Select Network. That plan does not give patients the option of paying more to go "out of network," so his Boeing patients would have to pay cash or find other doctors.

When he looked at Regence's raw data, he was stunned, he said. For example, he said, 11 percent of the patients Regence used to rate him had never been in his practice, and more than half the "diabetic patients" used to measure his care were not diabetic.

Schiesser said he was also downgraded because it appeared from claims data that he'd never prescribed medications for a patient with high blood pressure. He said he gave him samples because the patient couldn't afford the medications.

Robertson said he realized that billing data do not always tell the whole story. But patients and businesses across the country are demanding "transparent" quality and efficiency data about health-care providers.

"Litigation doesn't serve the best interests of the physicians or the consumers, nor will it reduce the desire by consumers — patients and purchasers paying for health care — to have this information," Robertson said. "We will vigorously defend the rights of our members to have this available."

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com