Blue Cross Launches New `Pay for Performance' Clinic Incentive Programs; New Programs Will Reward Clinics for Proven Positive Outcomes - Total Payments Could Reach More Than $1 Million.

Business Editors/Health/Medical Writers

EAGAN, Minn.--(BUSINESS WIRE)--Sept. 16, 2003

Blue Cross and Blue Shield of Minnesota recently launched two new outcomes-based provider incentive programs called Recognizing Excellence(SM) and Assisting Smokers to Quit. Blue Cross, the largest health insurer in Minnesota, is taking a lead in the "pay-for-performance" trend that is sweeping the country. Unlike other incentive programs, these new programs are focused on proven positive outcomes, not just incremental improvements in clinical practice.

Recognizing Excellence and Assisting Smokers to Quit will reward clinics that achieve superior, measurable outcomes in specific predefined areas. They represent a fundamental shift in Blue Cross' approach to provider reimbursement; moving it away from rewarding process improvement activities to rewarding provider performance relative to proven clinical outcomes. The incorporation of performance-based measures is part of Blue Cross' larger reimbursement strategy and these new programs set a high threshold for success. The first year, the programs will focus on five clinic specialties and impact approximately 150,000 Blue Cross members. These new programs will be expanded over time to include additional provider specialties and types, including hospitals, impacting more Blue Cross members.

"Blue Cross has a long history of working with providers on clinical improvement activities. The size of our network gives us the opportunity to work with nearly every provider in the state," said Doug Hiza, M.D., Blue Cross medical director of provider relations.

Over the past decade Blue Cross has used a number of approaches to assist clinics in developing the infrastructure needed to provide better care.

"Working with clinics on quality improvement activities is nothing new for Blue Cross. But what is new is the programs' commitment to hold contracting clinics to the same high standard of care delivery," said Hiza.

"Our programs are about rewarding clinics who 'make the grade'. In other words, we are not going to reward incremental improvement if it does not meet our threshold for optimal patient care. We want to recognize and reward the clinics who have made the investment to deliver high quality care. Everyone should have the same standard. Our members expect high quality care regardless of where they go. For those clinics who don't meet the standard, we will work with them to improve care, but we shouldn't reward them."

There are a number of resources available to assist clinics in meeting quality standards. Blue Cross resources include programs such as the innovative relationship with American Healthways (a large disease management company), and access to pharmacists from Blue Cross' pharmacy benefits manager. Community resources include the Stratis Health organization and the Institute on Clinic Systems Improvement, in which Blue Cross is an active member.

According to a March 2002 report from the National Health Care Purchasing Institute, the concept of outcome-based clinic incentives is still relatively new and such strategies have not been widely implemented. The findings from the report indicated that the Minnesota market is ripe for the type of clinic incentive program that Blue Cross is implementing.

"We believe that we will do well. We know that it will be difficult because it's based on outcomes. This is a challenge, but we think we can do it," said Don Wennberg, M.D., medical director Brainerd Medical Center, a clinic participating in the incentive programs. "When we're talking to patients, it's one sided. Practicing outcomes based medicine requires patient participation. We are going provide guidance to our physicians and staff."

Participation in these programs is voluntary and was offered through an addendum to the Aware(R) (open access) contract. Recognizing Excellence and Assisting Smokers to Quit will completely replace past quality-based incentive programs. Both programs use a population measurement approach whereby clinics report on (or measure) the outcomes achieved by all patients they serve. For the contract year from July 2003 to July 2004, participating clinics could earn financial rewards ranging from $12,000 to $500,000, based on clinic size and number of Blue Cross members. Blue Cross could pay out more than $1 million in rewards in the first year of the program.

The new programs will provide monetary recognition for excellent performance and will identify opportunities for improvement that will eventually result in better patient care. Participating clinics will self-report most metrics. The following measures were developed in five provider specialties: internal medicine, family practice, pediatrics, OB/GYN and cardiology.

-- Clinical Outcome Metrics -- Two measurements per specialty

focusing on disease specific results designed to measure

optimal management of patients with conditions, such as

diabetes, pediatric asthma, or hypertension.

-- Generic Prescription Patterns -- One measurement per specialty

area will be used with the goal of increasing the appropriate

use of generic drugs.

-- Descriptive Clinic Information -- Participants are required to

provide additional descriptive clinic information, such as

languages spoken in the clinic to enhance Blue Cross members'

understanding of clinic capabilities.

-- Tobacco Metrics - Participating clinics will report two

tobacco dependence metrics focusing on the documentation of

tobacco status and tobacco users who received documented

assistance to quit.

Purchasers expect that health plans will work collaboratively with providers to try new, innovative ways to improve the health care delivered to its employees and to control rising health care costs. Employers are looking to health plans to quantify the quality of care delivered by network providers. To that end, throughout 2004, Blue Cross will be expanding the Recognizing Excellence program to include additional provider specialties and Minnesota hospitals. Blue Cross is committed to incorporating these outcome-based performance principles into provider contracts over time. Through these new and innovative programs, Blue Cross will develop and share information that supports consumer involvement in health care decision making.

Blue Cross and Blue Shield of Minnesota, with headquarters in the St. Paul suburb of Eagan, was chartered in 1933 as Minnesota's first health plan and continues to carry out its charter mission today: to promote a wider, more economical and timely availability of health services for the people of Minnesota. A not-for-profit, taxable organization, Blue Cross is the largest health plan based in Minnesota, covering 2.6 million members in Minnesota and nationally through its health plans or plans administered by its affiliated companies. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago.