CareFirst Specialist Cost Tier Methodology


This webinar on CareFirst’s Specialist Cost Tier Methodology, hosted by MCMS on January 28, 2020, was an action item agreed upon after the initial Q&A session with CareFirst representatives Brian Wheeler, VP, Practice & Payment Transformation and Deb Rivkin, VP, Government Affairs for Maryland on September 10, 2019. The transcript of that meeting is available online.

For a detailed step by step explanation of the cost tier methodology, please see the above slide deck. The following is a summary of that process, prepared by MCMS staff.

Do I have a tier ranking? 

Tier rankings currently only exist for specialists, and each specialist must meet the following criteria to receive one:

  • A specialty group must have a minimum of 10 ranked providers.
  • The specialist must have a minimum of 10 episodes (the series of sequential health services that are related to the treatment or management of a given illness) in any disease stage and a minimum of 30 total measurable episodes for the 2 years combined.
  • At least 5% of the specialists’ total episodes must have been from the most recent data year. (At the time of publishing, the most recent data year is 2018.)

Additionally, years are weighted at 40% and 60% to favor the most recent data, and tier rankings and cost calculations are made in two separate cohorts: Adult (episodes for patients >21 years) and Pediatric (episodes for patients <21 years.) This means that an individual specialist may have two different rankings.

Who receives my ranking?

Primary care clinicians who are participating with CareFirst’s Patient Centered Medical Home Model receive rankings for specialists that their existing patient population is currently seeing.  Under the PCMH model, there is no compensation impact for referring to a yellow or red ranked specialist. Instead, compensation is impacted by the cost of the individual referral episode.

How are episodes assigned to me?

Specialists are identified by National Provider Identifier (NPI) number. If network status is both primary care and specialty, the most commonly occurring specialty identified in claims data for each NPI is selected as the dominant specialty for each physician.

Each episode is assigned a unique dominant provider based on the rendering NPI with the highest dollars contributing to the episode. (CareFirst’s allowed amounts closely track Medicare RVUs and account for variations in complexity of services rendered by clinicians.) Medical episodes must also include at least one E&M visit to be assigned to a clinician.

What is the ranking process for each specialist?

Step 1: Software captures all claims for three performance years across the specialty. Related claims are then grouped into an episode by calendar year. Finally, costs per episode are gathered and assigned to a unique clinician.

Step 2: All like episodes processed by CareFirst are listed from most to least costly and the median cost is identified.

Step 3: Outlier control is incorporated. High cost outliers (episodes with a cost > 3x the median are capped at 3x the median cost and remain in the cohort) and low cost outliers (episodes with a cost <1/10th the median cost within each grouping are removed from the cohort) are excluded.

Step 4: After the cohort is adjusted for outliers, an average cost for the episode category is calculated.

Step 5: All episodes in each episode category for which there is sufficient data performed by a given specialist are identified and an average cost is calculated for each one.

Step 6: The results for the specialty counted in the episode category are combined with their results on other episodes managed to determine an overall ranking for all cases managed.

Step 7: Once all the episodes are combined for each specialist, and each performance year is weighted, a final cost ranking for each specialist is determined. These rankings are generated with a percentage of average costliness above or below the average for the specialty, and assigned a color. Green for the low cost quartile, yellow for the low and high mid cost quartiles, and red for the high cost quartile.

How can I request my cost tier report? 

Email your respective Specialty Consultant to obtain a copy of your report.

  • Ashley Hankin, MPH, Manager, Specialty Consultant:
  • Colleen Harner, Specialty Consultant for Orthopedic Surgery, Ob/Gyn in Maryland (excluding Annapolis):
  • Tom Staskowski, MBA, Specialty Consultant for General Surgery, Gastroenterology, Cardiology in Northern VA, DC, and Annapolis: