New global payment model in Mass. focuses on cost-effective care rather than quantity

An independent physician organization in Massachusetts representing 1,800 doctors and Blue Cross Blue Shield (BCBS) of Massachusetts Inc., signed a multi-year contract that pays physicians with a modified global payment model designed to encourage cost-effective care, not the quantity of the care they deliver to patients.

The physician organization that signed the Alternative Quality Contract (AQC) is Beth Israel Deaconess Physician Organization (BIDPO), which is affiliated with Beth Israel Deaconess Medical Center. The organization has 500 primary care physicians and 1,300 specialists, which is the largest physician organization to join the AQC to-date. The BIDPO network includes hospital and community-based physicians.

The AQC includes a global, or fixed, payment per patient adjusted for age, sex, and health status as well as payments tied to performance on nationally accepted measures of quality, health outcomes, and patient care experiences. The contract’s global payment covers all services received by a patient, including primary, specialty, and hospital care.

In the BIDPO contract, there are 32 quality measures, including the appropriate use of breast, cervical, and colorectal cancer screening; pediatric and adolescent well visits; successful control of chronic conditions such as diabetes and high blood pressure; and other measures.

The contract covers approximately 75,000 health insurer members. With the addition of BIDPO, approximately 40% of the insurer’s HMO members are provided care by physicians in an Alternative Quality Contract.

The AQC is one of the largest private payment reform initiatives in the country, according to BCBS. This model was the focus the Massachusetts Special Commission on Payment Reform’s unanimous vote to move toward a global payment system as the best opportunity to moderate costs while promoting high-quality care.