Fair Process in Physician Performance Rating Systems

Programs to rate, grade, rank or tier physicians based on quality or other measures are becoming more commonplace as the demand for greater transparency and accountability in the nation’s health care system intensifies. Once they are in a network or practicing in a certain geographic area, physicians may be rated in a variety of ways by health plans, payers, hospitals or other entities that have some control over their practices or payments. Rating may be used to reward high-quality care and exclude, or steer patients away from poor performers.

In order to safeguard the interests of both patients and physicians, policy-makers have moved to regulate how physicians are rated and how that information is presented to consumers. This brief examines Colorado’s fair-process law, called the Physician Designation Disclosure Act, in the context of legal precedents. It focuses on Colorado’s law because it was one of the first state laws to specifically restrict physician-rating systems and has served as a model for other states that have passed or are considering laws restricting physician rating.