BCBSMA-The Alternative Quality Contract

BCBSMA launched the Alternative Quality Contract (AQC) in 2009 to move away from fee-for-service reimbursement models, with the goal of improving quality and outcomes while simultaneously slowing the growth of health care spending. Five key elements of the model:

• Contracted providers take accountability for the full spectrum of patient care, total medical expenses, and patient outcomes from prenatal to end-of-life care.
• Participating providers enter into a five-year contract (in contrast to the standard contracts of one to three years) in recognition that the process requires a long-term commitment to changing care delivery.
• Contracts are based on a global budget, and are negotiated based on providers’ historical rates of spending. If providers identify savings, they keep or share those savings under this model. BCBSMA also provides a technical assistance team to help participants track financial and patient data to develop strategies for reducing wasteful spending.
• The rate of rise in the global budget is much smaller than typical, with a tie to overall inflation.
• The AQC includes quality incentives. Providers have an opportunity to earn up to an additional 10% bonus for reaching a range of quality targets.

The improvement is driven by the global payment model that has liberated providers from the mindset that they can only deliver care attached to a specific billing code. The AQC members are also using data to make smarter decisions about health care delivery and purchasing.