Managed Healthcare Executive - March 2009 - (Page 12) { S P EC I AL RE PO R T} H ealthcare advocate David L. Knowlton, president and CEO of the New Jersey Health Care Quality Institute and the former director of the Leapfrog Group, says progress in information access and transparency programs have bene tted consumers, but those tools do not insulate them when the economic interests of providers and health plans collide. “The patient is the ping-pong between the two,” Knowlton says. Margaret O’Kane, founding president of the National Committee for Quality Assurance (NCQA), says if the payment structure in the healthcare industry were equitable—or at least perceived as such— con icts between payers and providers would give way to real improvement in quality patient care. O’Kane says all health industry stakeholders want patients to have timely access to e ective and appropriate preventive care, but the key is nding a course that’s economically feasible for all sides. “Ultimately, if you lose money when you improve quality as a provider, it’s just not going to work,” O’Kane says. Con icts between providers and payers often occur during contract negotiations. One such con ict occurred late last year in Greater Boston involving two high-pro le stakeholders. After an initial contracting battle between Blue Cross Blue Shield of Massachusetts (BCBSMA) and Tufts Medical Center, Tufts began notifying patients in early January that its doctors would no longer accept BCBSMA’s coverage after January 31. Tufts asserted that the insurer was unwilling to pay what it considered “a reasonable rate,” and therefore, Tufts could not a ord to be part of its provider network. The Boston Globe reported that BCBSMA reimbursed physicians 20% to 40% less than other major teaching hospitals in the area, even though the health plan itself had consistently ranked Tufts favorably among teaching hospitals in Massachusetts for quality of care. The 12 MARCH 2009 potential split between one of Boston’s most high-pro le providers and one of the biggest insurers in the country would have a ected 14,000 plan members, however, both sides did nally reach a new agreement on January 17—just days before the coverage change was scheduled to take e ect. among payers, providers and healthcare advocates who are collaborating now more than ever to develop e ective quality programs in the marketplace. Health insurers have moved from exploring the concept of P4P to insisting on it in their contracting language. While providers might balk at some of the nu- ALTERNATIVE QUALITY CONTRACT MODEL Performance In ation Savings Opportunity Expanded Margin Opportunity INITIAL GLOBAL PAYMENT LEVEL Expanded Margin Opportunity Year 1 Year 2 Year 3 Year 4 Year 5 Source: Blue Cross Blue Shield of Massachusetts Tufts signed BCBSMA’s Alternative Quality Contract (AQC), the insurer’s new payment model that aims to change the fundamentals of reimbursement through the emphasis of quality performance. BCBSMA Executive Vice President Andrew Dreyfus believes the AQC is a fair and e ective reimbursement tool because it combines adjusted global payment and pay for performance (P4P). The plan’s AQC contract with Tufts—speci c terms of which were not disclosed publicly—is evidence of the growing trend among payers to increase emphasis on partnership and accountability for quality in their provider business relationships. Some industry experts say stakeholders should prepare for the opportunities ances, they are becoming more open to the idea of being paid under stipulations of quality. The AQC is a ve-year commitment that pays providers a global payment permember, which increases annually in line with in ation, and is adjusted annually for age, gender, and health status. It covers all services received by a patient including primary, specialty and hospital care, as well as ancillary, behavioral health and pharmacy services. But it’s also di erent than traditional capitation because it combines adjusted global payment per-patient with performance payment, based on nationally accepted measures. The performancebased incentives can increase a provider’s total payment by up to 10%. BCBSMA designed the AQC to be
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