NCQA Is Setting Standards for Managed Care Plans

WASHINGTON--As managed care health plans continue to proliferate,the need has increased for ways to differentiate and compare plans,and give purchasers and consumers information on which to basedecisions about medical coverage.

Accreditation of health plans by a national, standards-settingorganization is becoming an important selling point in the fiercelycompetitive managed care environment.

The National Committee for Quality Assurance (NCQA) is the leadingprivate, not-for-profit organization that assesses and accreditsthe quality of managed care plans, primarily HMOs. The 5-year-oldWashington, DC-based NCQA, which began reviewing health-care plansin 1993, aims to provide information that enables both purchasersand consumers to compare plans based on specific quality factors.

At this point, NCQA has reviewed about half of the nation's 574HMOs. A team of doctors and managed care experts conducts bothon-site and off-site reviews, which consist of examinations ofdocumentation and medical records, interviews with health planemployees, assessment of member service systems, and 2 to 4 daysof observation.

This information is then compared against 50 nationally recognizedstandards for managed care organizations in six categories (seetable).

Standards for full accreditation are rigorous; 14% of the plansevaluated so far have been denied accreditation, while just 35%have been granted the full 3-year seal of approval. Other optionsinclude 1-year accreditation, accompanied by a list of recommendedchanges with reevaluation in 1 year, and provisional accreditationfor a year for those plans that meet some NCQA standards but donot qualify for higher levels of accreditation.

To help consumers, NCQA puts out an Accreditation Status Listthat provides plan data arranged by state or alphabetically. ThisJune, a new Accreditation Summary Report will provide more detailson individual plan accreditation decisions as well as show howa particular plan measures up against the average in each categoryof standards. NCQA data can also be accessed by computer .

Some of the country's largest employers now request accreditationdata from the health plans they are considering offering to theiremployees, and a growing number now require that plans be accredited.Companies that either require or request NCQA review include Xerox,USAir, Digital Equipment, IBM, GTE, GE, and Bristol-Myers Squibb.

Some observers, however, dispute the premise that accredited healthplans are rewarded with more members or higher profits. At leastone recent study suggested that purchasers are not terribly concernedabout whether a health plan is accredited or not, and that unaccreditedplans often thrive without the NCQA seal of approval.

Although most consumers, to date, appear to be unaware of theaccreditation option and how it works, the general direction seemsto be toward accreditation as a desirable credential that is increasinglydemanded by purchasers.

Possible Drawbacks

While accrediting health plans is, in general, a positive step,the practice does have several drawbacks. One is cost. The NCQAreview is not inexpensive (costs start at $30,000), and healthplans themselves bear the full expense.

Detractors say that the growing emphasis on accreditation favorslarge, well-established health plans and will drive out of businesssmaller, regional plans that cannot afford the review.

Another drawback is the tremendous amount of paperwork necessaryto document performance, both by plans and their providers. Mostphysicians now participate in multiple plans and must completeseparate and frequently redundant paperwork for each plan. Thisruns counter to managed care's claims to expedite and simplifythe health-care delivery process.

HEDIS 'Report Cards'

NCQA's complementary activity to their accreditation review involvesperformance measures using a health plan "report card"called HEDIS (Health Plan Employer Data and Information Set).

HEDIS 2.0 was released by NCQA in late 1993. An updated version,HEDIS 2.5, includes 60 standard areas that focus on clinical quality,access and satisfaction, membership and utilization, financialperformance, and plan management information. HEDIS 3.0, whichis currently under development, will include public purchaserdata and consumer interest representation.

"We continue to revise and update our standards to assurecurrency and periodically 'raise the bar,'" Margaret E. O'Kane,NCQA president, said in an interview. Over the next several years,the organization expects the accreditation process to be appliedto the majority of HMOs, as well as new areas such as behavioralhealth care, so that important information will be available toall purchasers and consumers.

"Holding health plans accountable to high standards willgo a long way toward improving managed care," Ms. O'Kanesaid.

Six Categories of Standards For Managed Care Plans

NCQA Data Available On the Internet

Consumers can now tap into the Internet for information on NCQAaccreditation of managed care plans. The Web site address is:http://www.ncqa.org.

"The Web site allows us to fulfill an important part of ourmission--increasing accountability by making quality informationwidely available to the public," said Mar-garet E. O'Kane,NCQA president.