Blue Cross Blue Shield of Massachusetts-Changing Incentives to Promote Better Care
Alternative Quality Contract
Improving Health Care through Greater Measurement & Accountability
Blue Cross Blue Shield of Massachusetts is testing an innovative reimbursement approach to improve the quality of care and ensure the appropriate delivery of medical services. With an estimated 30 percent of care provided being unnecessary, repetitive or redundant, BCBSMA is looking to incentivize optimal patient outcomes through the right treatment, by the right provider at the right time through its Alternative Quality Contract.
Working closely with providers to restructure the traditional fee for service payment system, BCBSMA is seeking to reward high quality, appropriate and efficient care. To accomplish this goal, the AQC will offer a combination of two kinds of reimbursement:
- A global, risk-adjusted, fixed payment per patient, with annual increases in line with inflation; and
- Performance-based incentives linked to nationally-recognized measures of quality, efficiency and patient experience.
By aligning provider payments with performance incentives, BCBSMA intends to improve the overall quality, transparency and affordability of healthcare for members, providers and employers.
1. Improving Quality by Linking Global Payments to Better Performance
In order to move away from the traditional fee for service reimbursement structure, which pays according to the number and complexity of services rendered, BCBSMA assigns a global, fixed payment per patient that encourages physicians and hospitals to avoid repetitive and redundant procedures. The base payment is determined according to the average medical expense for members in a geographic region, with risk adjustments made for age, sex and health status of each patient. Annual increases are incorporated into the payments in line with rates of inflation.
The revised payment structure encourages physicians and hospitals to coordinate patient care in order to provide more efficient treatment while enabling providers use to new and innovative approaches to patient care, such as:
- Provider-patient email exchanges and consultations;
- Group visits for a common condition;
- House calls following a hospitalization.
As cost-savings are achieved, participating providers are able to keep any unused portions of the global, fixed payment.
By coupling the global payment with performance incentives, however, the system safeguards against the possibility of under-treatment, encouraging physicians to deliver the best care possible. Thus, physicians are encouraged to avoid excessive medical costs while remaining accountable for the well-being of the patient.
2. Bringing More Accountability through Performance Incentives
In addition to the global payment structure, the AQC incorporates a financial incentive distributed according to provider performance and patient outcomes. Offering performance incentives supports providers in the pursuit of higher levels of safe, affordable, effective and patient-centered care and rewards both the absolute performance and performance improvement of physicians and hospitals. With five thresholds, or "gates," to recognize different performance levels, physicians are measured according to process, outcome and patient experience encompassing both inpatient and ambulatory care.
The incentive gate for which the physician qualifies is based on the aggregate performance score across the full set of clinical measures and carries correspondingly-increased rewards for each threshold. For example:
- Gate 1 results in a 2 percent incentive payout;
- Gate 3 results in a 5 percent incentive payout;
- Gate 5 results in a 10 percent incentive payout.
Potential Benefits of the Alternative Quality Contract
While still in the early stages of implementation, the AQC is designed to achieve three key objectives:
- Offer better care to members;
- Reward improved performance of providers; and
- Control the cost of premiums for employers.
The increased transparency and efficiency of care offers safer, higher quality and more effective treatment options, and allows members to choose providers who deliver the best care at cost effective rates. By allowing providers to reinvest the money saved from more efficient care into system improvements, the AQC expects to accelerate the development and implementation of provider initiatives to further improve safety and performance. Efficiency advancements will allow whole care teams to spend more time with patients.
