Regence doctor-ratings lawsuit settled

Six doctors along with state and national medical associations have settled a lawsuit against Regence BlueShield that alleged the health insurer used flawed and misleading ratings to reject doctors from a health plan for Boeing engineers.

The settlement, announced Wednesday, allows Regence, one of the state's largest health insurers, to keep measuring doctors' performance. But for the next two years, Regence must let the Washington State Medical Association (WSMA) comment on any new rating system before it takes effect.

The insurer also must tell doctors how they are being measured, let them use information from medical records to correct mistakes and let them appeal before scores are released to patients or the public.

Regence also will make a financial contribution to a WSMA foundation to help educate doctors about performance-measurement issues and promote quality improvement. The amount is confidential under the terms of the settlement.

Both sides said they were looking forward to working with each other to benefit doctors and patients.

"We recognize the important role that physicians play in serving our members and improving the health-care system," said Regence spokeswoman Angela Hult.

Dr. W. Hugh Maloney, president of the WSMA, said: "We appreciate Regence's willingness to collaborate."

For more than a year, Regence and the state medical association have been at odds over Regence's Select Network program, which was created under a union contract between Boeing and the Society of Professional Engineering Employees in Aerospace (SPEEA).

Boeing saw performance-based health care as having potential to increase quality and reduce costs. And about 45,000 union employees and family members liked the new plan because it had no deductibles and low co-payments, although it would not pay for visits to providers outside the network except in emergencies.

But early last year, Regence used performance measures drawn from billing data to knock about 500 doctors off the list being created for the new plan's network. Regence sent letters to about 6,000 Boeing workers and family members telling them their doctors did not meet "quality and efficiency" standards.

The doctors complained the rating system was just a cost-cutting measure in disguise.

The lawsuit in King County Superior Court claimed Regence's ratings were sloppy, inaccurate and relied on flawed methodology. In addition, it claimed that the letters Regence sent to patients defamed the doctors.

The American Medical Association joined the lawsuit as a co-plaintiff in November.

Regence apologized to doctors and patients for the "misunderstanding" and later abandoned the plan.

Regence's Hult said the insurer had no plans to re-launch the Select Network. Since Regence did not implement the Select Network, SPEEA members have kept using their benefit plan's existing provider network.

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