Private-payer innovation in Massachusetts: The 'alternative quality contract'

Health Affairs

Volumn 30, Issue 1, 2011, Pages 51-61

  Chernew, Michael E ^a   Mechanic, Robert E ^b   Landon, Bruce E ^a   Safran, Dana Gelb ^c  

^a HARVARD MEDICAL SCHOOL   (United States)

^b BRANDEIS UNIVERSITY   (United States)

^c Blue Cross Blue Shield of Massachusetts   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ACETYLSALICYLIC ACID; ANGIOTENSIN RECEPTOR ANTAGONIST; ANTIBIOTIC AGENT; BETA ADRENERGIC RECEPTOR BLOCKING AGENT; DIGOXIN; DIPEPTIDYL CARBOXYPEPTIDASE INHIBITOR; INFLUENZA VACCINE;

ACUTE HEART INFARCTION; ALTERNATIVE QUALITY CONTRACT; ANTIBIOTIC THERAPY; ARTICLE; BLOOD CULTURE; BLOOD PRESSURE REGULATION; BREAST CANCER; BRONCHITIS; BUDGET; CANCER SCREENING; CAPITATION FEE; CARDIOVASCULAR DISEASE; CHLAMYDIA; COLORECTAL CANCER; CONTRACT; DEPRESSION; DIABETES MELLITUS; EXPERIMENTATION; HEALTH CARE ACCESS; HEALTH CARE COST; HEALTH CARE PERSONNEL; HEALTH CARE QUALITY; HEART FAILURE; HUMAN; HYPERTENSION; PATIENT CARE; PHARYNGITIS; PNEUMONIA; PRIMARY MEDICAL CARE; PRIVATE HEALTH INSURANCE; SMOKING CESSATION; SURGICAL INFECTION; UNITED STATES; UPPER RESPIRATORY TRACT INFECTION; UTERINE CERVIX CANCER;

BLUE CROSS BLUE SHIELD INSURANCE PLANS; CONTRACT SERVICES; COST SAVINGS; HUMANS; MANAGED CARE PROGRAMS; MASSACHUSETTS; ORGANIZATIONAL INNOVATION; PATIENT PROTECTION AND AFFORDABLE CARE ACT; QUALITY OF HEALTH CARE; REIMBURSEMENT, INCENTIVE; UNITED STATES;

EID: 79951641670     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2010.0980     Document Type: Article

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14. Global payments for some Alternative Quality Contract groups do not include mental health and substance abuse treatment services. In those groups, providers of those services are paid on a fee-for-service basis, and the expense is not counted toward the group's budget target.
15. The DxCG model is proprietary software available from Verisk Health. It is based on statistical analysis of claims data. The model generates a risk score for individuals that predicts spending based on diagnostic codes that appear in claims data. Because the risk adjustment is based on concurrent claims, final payment is not determined until the middle of the following year. However, groups are given regular updates of their risk profile and performance during the year. For example, the risk adjustment for 2009 was based on 2009 claims. Those claims are considered complete after April 2010, and analysis lasts until the fall of 2010.
16. If the unit cost (price) changes for a hospital used frequently by an Alternative Quality Contract group, the budget trend for that group is adjusted to account for that change.
17. For example, some groups may have their budget increase adjusted so that it never deviates from the overall Blue Cross HMO trend by more than a fixed amount (typically 2 percent). This illustrates the flexibility that Blue Cross uses in negotiating contracts.
18. Because of risk adjustment, groups that keep their patients healthier may receive lower risk scores and thus lower payments.
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