Calif. Blue Cross keeps own quality program, readies $28M payout

Calif. Blue Cross keeps own quality program, readies $28M payout

Rather than designing a quality and patient satisfaction reimbursement reward program around the Pay for Performance (P4P) metrics that other major payers are using with capitated medical groups (see article, p. 1), Blue Cross of California’s (BCC) HMO is retaining the incentive program it developed two years ago (PCR 9/01, p. 5), says company spokesman Michael Chee.

Chee says the HMO incentive program has been through its initial data-gathering year and will award its first bonus checks this coming fall. These checks will total $28 million paid to 75 medical groups and IPAs out of more than 200 that contract with the BCC HMO. The HMO covers 1.7 million members.

BCC, a unit of WellPoint Health Networks, is sticking with its own bonus metrics in part because it would be too confusing for groups to handle two sets of incentive measures from the same company, he explains.

A group that earns top grades on all nine BCC criteria will win a 10% added payment on top of its annual capitation fees from BCC, Chee says. No payer using P4P bonus criteria is paying top awards of more than 5% of capitation fees.

Two years ago, BCC scrapped old incentives–aimed mainly at cost control–in favor of new ones aimed at quality of care, collecting data about care, and patient satisfaction. BCC’s quality and satisfaction criteria include most of those in the P4P program. P4P requires groups and IPAs to collect quality data, but does not grant bonuses for the collection activity. P4P awards 10% of its bonuses for certain levels of information technology use; the BCC bonuses have no information technology component.

One BCC incentive criterion is whether each group has an effective system for measuring how individual physicians are performing on patient satisfaction and HEDIS (i.e., Health Employer Data and Information Set) preventive medicine scales–and whether there’s a system for paying bonuses to individual primary care physicians who do well in these areas. Chee says the firm is not looking for any particular bonus system, just for a system that puts more money into the pockets of PCPs who do well on preventive and satisfaction measures. Health Net offers a 10% expansion of its group bonus amount for similar individual physician incentives. In general, though, it is rare for payers to contract concerning physician compensation formulas.

Physicians caring for BCC’s more than 4 million PPO members are not eligible for these incentives, but are eligible for different quality incentives rolled out for the PPO in October 2002.

One BCC bonus criterion is whether each group collects, and submits to BCC’s case management department, timely data about long-term inpatients in hospitals, rehab centers and skilled nursing facilities. Among the firm’s quality measures are the numbers of member appeals and grievances, and patient medical-group transfers due to member dissatisfaction. Other BCC quality incentives require groups to have utilization management systems–but not aimed at any particular levels of utilization. Thus, many of BCC’s quality criteria are aimed at parts of the process to assure quality, while P4P’s are aimed entirely at preventive and chronic disease management actions taken for patients.

The BCC HMO groups still have inherent cost-control incentives, because they are all capitated. Since they are multispecialty, the cost incentives extend to specialist referrals. One bonus standard is generic prescribing.

Contact BCC at (805) 557-6791 or

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