Blue Cross to double incentives for Massachusetts physicians

Blue Cross Blue Shield of Massachusetts has announced that it would double the amount it spends on performance incentives for physicians and hospitals in Massachusetts this year.

The company plans to spend $189 million—or 4% of its 2005 provider payouts in the state—on incentives, making it a leader among insurers in the pay-for-performance movement nationally, said the May 10 Boston Globe. Under the program, incentives will make up as much as 13% of the insurer’s payments to 5,200 primary care physicians in the state—compared with 10% now—or about $10,000 per individual physician.

The move by the nonprofit company sparked some criticism from physician groups, the Boston Globe said. A representative of the Massachusetts Medical Society was quoted as saying that insurance companies should wait until nationally accepted quality measurements are in place and more physicians have installed electronic health records.

Blue Cross executives interviewed in the article said that the company may begin to replace its annual inflation updates with the pay-for-performance incentives. Even though a standardized measurement system is not yet in place, they said, payments based on quality and efficiency are necessary to stem rising costs and premiums, which have increased more than 10% annually for five years in a row.

Blue Cross is also developing programs that would base between 5% and 10% of payments to specialists on performance scores, said the Boston Globe. The company is expanding its hospital incentive program to include 60 hospitals, up from 29 last year.

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