An Update on the MMS Lawsuit Against the Group Insurance Commission

By Bruce Auerbach, MD
Past President, Massachusetts Medical Society

Bruce Auerbach, MD, FACEP

In 2008, as I began my one-year term as president of the Massachusetts Medical Society, the MMS and five physicians filed suit against the Massachusetts Group Insurance Commission (GIC), and two health insurers, Tufts Health Plan and Unicare, over the state program that rates (or “tiers”) doctors based on the cost and quality of the care they provide.

The lawsuit sought to “right the wrongs” of the program, in which patients are charged higher or lower co-payments based on their doctors’ cost and quality scores. (The GIC purchases health insurance for employees of the state and several cities and towns.)

The lawsuit stated that the program is grossly inaccurate, and misleads patients and defames doctors. We alleged that the program is an illegal interference in the business relationship between a doctor and a patient, and that it violates the state’s consumer protection laws. We asked for no specific damages, but simply for the court to order the GIC to fix the program.

However, after three years of motions, hearings and counter-motions, a state judge recently dismissed the GIC from the case. She found that physicians do not have a direct commercial relationship with the GIC, rendering the claims of business interference moot. Tufts and Unicare remained as defendants in the case. The judge issued no ruling or comment on the merits of our arguments.

We considered pursuing the case against the two remaining health plans, but even if we succeeded, it would have affected only their customers, not those of the four other health plans in the program. Further, it might have caused even more disruption to our already chaotic health care system, which made us uncomfortable.

So with these rulings, our trustees felt they had little choice but to terminate the litigation. They directed us to continue working to correct the program by other means.

Despite this decision, we believe our litigation did bear some fruit. We have been heartened by the fact that Independent researchers have upheld our fundamental arguments. Last year, RAND issued a series of research papers that were sharply critical of the GIC’s specific methodology. It found that the program misclassified physicians 22 percent of the time. For some specialties, it was much worse: 50 percent of internists and 67 percent of cardiovascular surgeons who were rated as low-cost physicians actually had an average cost profile. In the New England Journal of Medicine, RAND researchers wrote, “Consumers, physicians and purchasers are all at risk of being misled by the results produced by these tools.”

We also believe that because of this research, along with the attention focused on the issue by our litigation, health plans across the country have generally rejected the GIC’s practice of tiering individual physicians, even as limited provider networks and physician tiering have become more prevalent. It is now far more common for health plans around the country to rate physicians as part of practices or groups, where the data and ratings are far more reliable.

Despite these signs of progress, we are left with a program in Massachusetts that has deep flaws. We know of specific instances where patients are still being negatively impacted by this program, which is of paramount concern to our board members and our physician colleagues throughout the state.

So we have a lot of work to do. We will continue to fight vociferously to fix the GIC’s tiering program, though in different venues. We even retain the right to go back to court, particularly if the legal climate changes.

I want to extend a special thanks to the five physicians who agreed to serve as plaintiffs in the case. The entire physician community owes them a debt of gratitude. They performed a great service to the profession, and to patients throughout Massachusetts.

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