Physicians in Chicago and Cleveland are steeling themselves for the launch this spring of a pay-for-performance program developed by UnitedHealthcare.

The program comes with a 5 percent increase in reimbursement to physicians who meet the insurer’s standards of quality care and efficiency.  There’s no need to apply – United Healthcare will automatically enroll the doctors.

It seems like a boon. But for many physicians, it could be viewed as added stress, says Howard Axe, MD. Axe, an internal medicine doctor in an 18-physician group in Chicago, sits on the national Physician Advisory Committee that is helping guide UnitedHealthcare’s implementation of the initiative.

If it proves successful, UnitedHealthcare plans to take the concept to other markets.

In Axe’s view, there are a number of glitches with the program. For one, it is based on claims data. Using clinical data would be better, but it would be hard for most physicians to gather and report because most of them have yet to adopt electronic medical record systems. Also the pilot falls in the shadow of a controversial program that UnitedHealthcare launched in St. Louis last year.

Mark Rattray, MD, UnitedHealthcare’s national clinical director for clinical advancement, joined the company eight months ago. He is confident that the problems that plagued the insurer’s Performance Provider program in St. Louis have all been addressed, he said. “I’m pretty excited about this program,” Rattray said. “The concept is pretty comprehensive.”

Not technically a pay-for-performance program, because no added pay or bonuses were involved, the measures UnitedHealthcare aimed to assess in St. Louis were totally focused on efficiency.

“That is not what you want to do,” said Rattray. The criticism leveled at UnitedHealthcare then was a “major learning experience,” Rattray said, and the company has done a 180-degree turn in crafting the Practice Rewards pilot it is about to launch in Chicago and Cleveland.

“We’re not even measuring a physician unless they pass a quality threshold,” Rattray said. In the revamped formula for measuring physicians, quality weighs in at 51 percent, cost efficiency at 30 percent and administrative efficiency at 19 percent.

In an e-mail to its members in Chicago and Cleveland, the Medical Group Management Association applauded UnitedHealthcare for involving more physicians in the process and for putting quality first.

“After the controversial debut of the carrier’s Performance Provider program in February 2005, UnitedHealthcare has taken some aggressive steps to improve its strategy for interacting with the provider community,” MGMA wrote.  “Additionally, UnitedHealth care reversed the priority of its criteria for the UnitedHealthcare Premium designation, making quality the first criterion, followed by efficiency.”

Axe approves of putting quality before cost, and he knows some benefits could be realized by measuring performance and by having data readily available to physicians, he said.

“The intention is good,” Axe said, but physicians bristle even at the mention of “pay for performance,” taking issue with the terminology itself. To them, it implies they are not already providing quality care.

Physicians across the country are facing increased operational costs and taking a hit on reimbursements from Medicare and private payers. “They are forced to take pay cuts or become more productive,” Axe said.  In his view, any program designed to improve outcomes and quality of care should be infused with new money from those who stand to save money – the health plans and the employers, rather than just moving money around.

While Rattray could not say specifically how much money had been set aside for UnitedHealthcare’s Practice Rewards program, he said it was part of a larger budget that addressed UnitedHealthcare’s efforts in transparency, evidenced-based medicine and quality care. It would in no way take money from reimbursing physicians, he said.