Specialists to share the wealth in Massachusetts Blues bonus plan

The incentive-based pay system will reward both primary care physicians and larger multispeciality groups.

By Mike Norbut, amednews staff. Jan. 13, 2003.

Massachusetts' largest health insurer has created a new bonus plan that rewards physicians based on both quality and cost control, and it plans to incorporate specialists into the payment plan.

Blue Cross Blue Shield of Massachusetts, which already has a quality-based bonus system for primary care physicians in its HMO network, is rolling out its HMO Blue Group Performance Incentive Program this month. Groups representing about 8,000 physicians already are enrolled, and Blues officials expect to expand the program in 2004.

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Region: Northeast

Larger multispecialty groups -- those serving more than 8,500 HMO Blues members -- will be eligible for up to a 10% bonus above the normal fee schedule, according to plan officials. The bonuses will be applicable to both capitated and fee-for-service contracts, and groups will be expected to share the bonuses with the individual physicians, namely specialists, said James Fanale, MD, chief medical officer for the Massachusetts Blues.

"We firmly believe you cannot have an incentive-based pay system and ignore both sides of the equation," Dr. Fanale said. "This puts together specialists and primary care physicians. We wanted to involve the specialists."

Mass. Blues awarded more than $16 million in bonuses to primary care physicians in 2002.

Massachusetts Medical Society President Charles A. Welch, MD, said he approved of combining quality and cost measures, provided the criteria didn't put physicians in an ethical dilemma. He also applauded the general efforts of paying for performance, though he said plans needed to align their measurements to make it easier for doctors to participate.

Pay-for-performance programs are emerging all over the country as insurers look for ways to control rising costs. In California, six health plans have agreed on quality standards to apply universally to participating physicians, though many doctors are still skeptical because some plans have not yet announced how the bonuses would be paid.

However, few plans have combined quality and cost control measures into one package the way the Blues plan proposes. The program also will include a patient satisfaction component, based on questionnaires offered to patients who visit high-volume specialist practices.

Doctors who score in the 75th percentile on quality measures already used in the incentive program for primary care physicians, including mammography, diabetes management and asthma medication management, will be eligible for a bonus. The cost-based component will measure each group's medical expense trend against the network's average from the previous year, starting with October 2001 to September 2002. If a group's trend is lower than the network average, it will share in the difference.

"What drove us to consider this is we want to support those physicians who take the time to explain options to the member that are less costly," said Deb Devaux, Blues' vice president of provider contracting. "We want them to tell the member if they don't necessarily need an MRI or if a generic drug can be used."

Blues officials stress the bonus money will not come out of a reduced contracted payment. The Blues plan awarded more than $16 million in bonuses to its primary care physicians in 2002.