UnitedHealth Group Makes Nice to Physicians

(MoneyWatch)  UnitedHealth Group is not very popular among physicians. Among other things, the insurance giant forced them to take plans they didn't want in New York and California following mergers with Oxford and PacifiCare, respectively. Last month, United's Ingenix subsidiary settled a class-action suit and an investigation by New York Attorney General Attorney General Andrew Cuomo. In both cases, Ingenix was charged with creating a database that enabled United and other health plans to pay out-of-network physicians far less than they should have. The doctors, in turn, had billed patients for the balance, so the patients paid more than they should have. United settled its part of the class action for $350 million, and, in the New York settlement, agreed to pay $50 million to set up an independent entity to determine "usual and customary" charges out of network.

Now United is doing some things that should please physicians, at least in the long run. Having committed itself to issuing machine-readable identification cards to all its members, United recently adopted new industry standards for these cards, which will enable doctors to immediately determine patients' insurance eligibility and to obtain basic health information about each patient. The cards will be provided to members of all United plans by Jan. 1, 2010.

The Medical Group Management Association hailed the move by United. "We hope UHG's prompt action will challenge its competitors, both large and small, to place a priority on issuing machine-readable ID cards," said William F. Jessee, MD, president and CEO of MGMA. "Adoption will help eliminate the $1 billion in waste that current cards cause each year. It's vital that insurers take the first steps toward machine-readable cards. If they do, vendors and the provider community will certainly follow suit."

Of course, United isn't doing this just to make doctors happy. When it first introduced its "smart cards" in 2007, they were also debit cards that could be used by patients in its consumer-driven health plans, including those who had accounts with United's own HSA bank. And the smart card demographic data could be used to populate forms on a United website that would tell offices how much a patient owed before he or she left the office. That would be a plus for practices, considering how many patients have high deductibles.

United's latest physician-friendly move is to test the concept of the "patient-centered medical home," which is being promoted heavily by primary-care medical societies. The big insurer has partnered with IBM to try out the medical home concept with 26 Arizona doctors in seven practices whose patient populations include IBM employees. Over the past year, United has also tested the medical home in Colorado and Rhode Island. An earlier pilot in Florida never got started because physicians refused to participate. While the doctors had specific gripes, including insufficient seed money from United, a state medical society official said that the doctors also disliked United.

In Arizona, United is providing more support to the physicians in the test, and it has also hired a consulting unit of the American Academy of Family Physicians, which previously conducted its own medical home pilot, known as "TransforMed." Participating physicians can qualify for as much as a 30 percent boost in pay by coordinating patient care. In return, United says, it expects double-digit decreases in hospital stays and emergency-department visits.

Some things never change.