CLINICAL PERFORMANCE IMPROVEMENT INITIATIVE

1. CLINICAL PERFORMANCE IMPROVEMENT INITIATIVE

2. Clinical Performance Improvement Initiative • Began in 2003 – with the purpose of using a large database of claims to analyze performance of specialists on both cost-efficiency and quality • Tier physicians based on both quality and cost-efficiency scores • Health insurers tier individual physicians, placing approximately 20% in Tier 1, 65% in Tier 2, 15% in Tier 3 • In pursuit of greater transparency, inform patients of results of physician evaluation and give modest incentives to encourage the use of Tier 1 & Tier 2 providers • High level methodology for Round 10 • All six GIC health insurers tier providers in at least eight clinical specialties using quality (where available) and cost-efficiency scores • Provider tiers are published in provider directories – not a publicly distributed “Report Card” • 20% / 65% / 15% distribution by specialty • Providers with insufficient data (ID) are not included in the distribution • Providers are compared to other providers in their own specialty • Not all specialties are tiered

3. Clinical Performance Improvement Initiative Core Specialties • Cardiology • Endocrinology • Rheumatology • OB-GYN • Orthopedics • Gastroenterology • Pulmonology/Pulmonary Disease • ENT/Otolaryngology Non-Core Specialties • Hematology & Oncology • Neurology • Ophthalmology • Dermatology • Allergy/Immunology • General Surgery • Urology • Nephrology • Podiatry

4. Clinical Performance Improvement Initiative Quality ‘hurdle’ – step one in the tiering process • Quality scores are developed by RHI (a division of WellPoint) • Over 100 quality measures • Most endorsed by NQF • Providers scored on measures specific to their specialty • In response to physician concerns, scores are adjusted through a statistical model created by a John Hopkins biostatistician to account for the relative difficulty of each measure, patient compliance, and the number of observations • Only physicians who have a 90% probability of being in quality designation A, B, or C are assigned a quality designation • Physicians who scored a C on quality automatically go to Tier 3 • All other providers move on to cost-efficiency scoring

5. Clinical Performance Improvement Initiative Cost-efficiency score – step two in the tiering process • Cost-efficiency scores are developed by VIPS (a division of General Dynamics) using ETGs, a product of Symmetry that is well known and widely used by health insurers and physician groups • Claims are bundled into Episode Treatment Groups (ETGs) and contract-neutral prices (proxy prices) are applied • An expected price is developed for each ETG with 100 or more occurrences • Any provider with over 30 observations is scored • Physicians who passed the quality hurdle are assigned to tiers based on their efficiency scores to achieve the overall 20%-65%-15% distribution

6. CLINICAL PERFORMANCE IMPROVEMENT INITIATIVE UPDATE ON QUALITY MEASURES

7. Update on Quality Measures Current methodology The statistical model calculates a physician’s adjusted quality score108 Quality Measures for Round 10 Factors that affect physician’s adjusted quality score: • Level of difficulty for each quality measure; evaluates the physician’s performance relative to how other physicians in the same specialty performed on that same measure • Patient effect, each of whom has a particular likelihood of complying with his/her physician’s recommendations • Effect of the number of observations for a particular physician available in the GIC CPII database

8. Update on Quality Measures Current methodology GIC CPII decision rules for quality tiering • Minimum of 30 observations for a physician, AND • Probability of >=0.9 of being in A or C • If either of the above criteria is not met, physician is assigned to B

9. Update on Quality Measures Current methodology • The CPII provider attribution logic identifies all physicians that have had encounters with the patient, but attributes the quality measure to only one physician in a given specialty • Expectation is that the PCPs and relevant specialists should coordinate to ensure that the patient has the recommended care • Attribution logic for chronic disease management identifies relevant physicians with the most evaluation and management claims over past 18 months

10. Update on Quality Measures Recent changes • Increased measure count • Majority approved by NQF • 2nd year of data added • Increased number of doctors with quality scores • Decreased tier shifting • Increased the confidence level required for a physician to receive a quality score from 75% to 90% • Two or more evaluation and measurement visits are required for a quality observation to be attributed to a physician

11. EFFICIENCY UPDATE ON EFFICIENCY MEASUREMENT

12. Upgrade on Efficiency MeasurementCurrent methodology

13. Upgrade on Efficiency MeasurementRecent changes • Created separate norms for adult vs. pediatric ETGs • Increased the minimum number of episodes necessary for a norm to be created for a particular ETG to 100 • Expanded the list of excluded specialty/ETG pairs to over 400 • Upgraded to Symmetry Grouper to 7.6 • Calculations incorporate a severity adjustment • For some specialties, separate norms are calculated for with and without surgery • Norm With Treatment Indicator: • Core: OBGYN, Otolaryngology, Orthopedic Surgery • Non Core: Hematology & Oncology, Ophthalmology, Urology, Podiatry, General Surgery • Norm Without Treatment Indicator • All other specialties