Blue Links for Employers

Transforming the PPO Payment Model

We're Leading the Way Toward a Better Health Care System
Health care delivery is rapidly changing, and a stronger focus on delivering value—a combination of quality and cost—is critical to employers and their employees.

With our broad local presence, unprecedented national scale, and the largest provider network in the industry, we're strongly positioned and firmly committed to addressing these needs.

More Care Does Not Equal Better Care
Today's health care system largely runs on a fee-for-service model, where doctors are paid for each service they perform. This can lead doctors to focus more on the number of services they provide, rather than the quality of the services they deliver.

We believe that doctors and hospitals should be rewarded for delivering improved care and better outcomes. That's why in 2009 we led the way with an innovative payment model called the Alternative Quality Contract (AQC), which compensates doctors for positive patient outcomes based on national quality standards and establishes a global population-based budget with mechanisms to significantly slow medical spending growth.

The AQC has since become an industry model for state and national policymakers. In fact, a recent study by the Harvard Medical School1 confirmed that by year 4, the AQC slowed medical spending growth by 10 percent compared with the market, and improved health outcomes significantly—earning quality and outcome scores twelve points higher than the national average.

1. New England Journal of Medicine, October 2014

Transforming the PPO Payment Model
Building on the success of the AQC, our PPO Payment Model applies many of the same principals and expands them nationally to our PPO network. Recognizing doctors and hospitals across the country for their efforts in coordinating total patient care, and rewarding them for positive outcomes, can result in significant benefits for you and your employees. We understand the importance of being able to provide affordable health care. That's why we're committed to delivering greater value through a national effort among Blue plans to change how we work with our PPO network providers.

Beginning in 2016, we're leveraging the strength of the national Blue Cross system, including our partnerships with 96 percent of hospitals and 92 percent of doctors throughout the country, to create the most comprehensive value-based care program available. PPO network providers that are part of a value-based program and meet national criteria for delivering high-quality, affordable health care will be selected to participate in the PPO Payment Model program. This uniquely positions us to deliver an outcomes-based program that currently reaches more than 25 million members where they live and work.

Benefits for Employers and Employees
Our PPO Payment Model preserves employees' ability to choose any provider they wish to see, while improving the quality and value of the care they receive. We offer flexibility by providing local-based care programs that meet the unique needs of both the employer and employee. These programs deliver tailored, value-based care that the more common “one size fits all” national approaches cannot. Our PPO Payment Model program:

  • Will deliver maximum savings and improve health outcomes through better management of patients' total health
  • Has shown early results in improving key areas, such as lower hospital admission rates, fewer emergency room visits, and a rise in health screenings 2
  • Will motivate employees to be more active participants in their health
  • Will engage employees through comprehensive, patient-centered care
  • Will increase employee productivity through use of preventive services, the choice of appropriate care when needed, and enhanced access to care

2. Based on early national results.

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How PPO Payment Model Works
Physicians and hospitals are selected to participate based on the following six standards for providing affordable, quality care:

  • Focused on managing care for all Blue Cross members
  • Based on actual patient claims data, Blue Cross members are attributed to a provider that acts as a primary care provider and is accountable for managing each patient's total care
  • Provider contracts contain value-based incentives that cover cost and quality outcomes
  • In-network providers are responsible for using data and analytical tools that help improve quality and affordability
  • Nationwide availability for PPO members
  • Availability to members covered by administrative services only and fully insured products
Empowering Doctors
Through our PPO Payment Model, doctors have greater access to the data and analytical tools they need to be more accountable, and better coordinate patient care. This change leads to focused patient visits and positive health outcomes, as well as more affordable care. Benefits include:

  • Improvement in quality care—more accountability leads to better patient management, with doctors focusing on stopping, stabilizing, or reversing the progression of disease
  • Care coordination—lowers costs through reduced risk of drug interactions from multiple physician-prescribed medications, lowers rates of inpatient admissions and readmission, and provides more guided recommendations on where to receive specialty or ancillary care
  • Increased compliance—tools allow doctors to monitor their patients to ensure fulfillment of all medical requirements

Quality. Service. Trust. The Cornerstones of Blue Cross.
As a trusted partner that serves one in three Americans, we have become a leader in health care through our:  

  • Local Approach—Our history of collaborating with providers in the communities they serve gives us the perspective and flexibility to tailor programs for local and regional differences
  • Unparalleled Provider Network—Blue Cross plans are already engaging more than 228,000 doctors across the country, each contractually accountable for total health care costs and quality management of the 25 million members attributed to them
  • Smarter Support Tools—We're securely sharing comprehensive data that empowers providers to make more informed decisions about staffing models that best serves patients, targeted approaches to patient care, objective patient referrals, and investments in their own data and IT systems

Additional communications will follow. If you have questions, please contact your account executive.

Blue Cross Blue Shield of Massachusetts

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