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Blue Cross Blue Shield of Massachusetts and Northeast Health Systems Physician Hospital Organization Sign Alternative Quality Contract

CONTACT: Jenna McPhee
(617) 246-7412
Jenna.McPhee@bcbsma.com

Agreement Expands Reach to the North Shore

BOSTON — May 25, 2010 — Blue Cross Blue Shield of Massachusetts, Inc. (BCBSMA) and Northeast Health Systems Physician Hospital Organization, Inc. (NEPHO) today announced that they signed a five-year Alternative Quality Contract (AQC). The agreement marks the first North Shore physician group to adopt BCBSMA's global payment model that is designed to improve the quality and affordability of health care.

This contract demonstrates the continued commitment between BCBSMA, a locally-based, community-focused health plan, and hospital and physician groups to partner together to help lower health care costs by changing the way we pay for care.

Northeast Health Systems Physician Hospital Organization, jointly owned by Northeast Health System, Inc., parent company of Beverly and Addison Gilbert hospitals, and New England Community Medical Group, represents a network of primary care and specialist providers, and acute inpatient and ambulatory care hospitals including Beverly and Addison Gilbert Hospitals.

The contract with NEPHO includes approximately 278 physicians affecting close to 29,000 BCBSMA members, greatly expanding the AQC's reach to the North Shore community. With the addition of NEPHO, 23 percent of BCBSMA's provider network is now in the AQC—providing care for nearly one-third of BCBSMA's Massachusetts-based HMO members.

"We must work collaboratively to address the rising cost of care and increase the quality of care our members receive," said Andrew Dreyfus, Executive Vice President of Health Care Services for BCBSMA. "By signing the AQC, NEPHO is part of a community solution to lower costs and improve care."

The AQC, a global payment model coupled with quality based incentives, is a significant change from traditional fee-for-service contracts and gives physicians the flexibility to allocate health care resources based on what will have the greatest benefits to patient health. It is designed to improve quality of care and patient experience, while significantly reducing annual medical cost trends.

"We are pleased to be partnering with BCBSMA to participate in an alternative to traditional fee-for-service, high cost health care, which provides both lower costs and higher quality of care to consumers and businesses in our market place" said Jeanne Holland, Executive Director of the Northeast Health Systems Physician Hospital Organization, Inc. "We look forward to being part of a select group of providers who put the needs of our patients and local community interests first."

Since January 2009, nine hospitals and physician groups have committed to improving the quality and affordability of care by signing Alternative Quality Contracts. They include: Northeast Health Systems Physician Hospital Organization, Inc., Mount Auburn Hospital and the affiliated Mount Auburn Cambridge Independent Practice Association (MACIPA); Hampden County Physician Associates, LLC (HCPA); Tufts Medical Center and the affiliated New England Quality Care Alliance (NEQCA); Signature Healthcare Corporation, including Brockton Hospital; Lowell General Hospital and the affiliated Lowell General Physician Hospital Organization; South Shore Hospital and the affiliated South Shore Physician Hospital Organization; Atrius Health; and Caritas Christi Health Care.

About the Alternative Quality Contract
The AQC is a significant change from traditional fee-for-service contracts. It combines two forms of payment. The first is a global, or fixed, payment per patient adjusted for age, sex, and health status that increases annually in line with inflation. The second payment includes substantial performance incentives tied to the latest nationally accepted measures of quality, effectiveness, and patient experience of care. The contract's global payment covers all services received by a patient, including primary, specialty, and hospital care. So, when a doctor spends more time with a patient and helps the patient avoid an unnecessary hospitalization, the patient receives better care, the doctor and hospital have the potential to receive performance incentives, and the overall costs are less. Employers benefit as the new system moderates cost increases through better care. Visit: www.bluecrossma.com/quality to learn more.

About Northeast Health Systems Physician Hospital Organization, Inc.
Northeast Health Systems Physician Hospital Organization, Inc. is a Management Service Organization (MSO) which provides management services, including contract negotiation and management of pay for performance and risk contracts, on behalf of its owners: New England Community Medical Group (NECoMG) and Northeast Health System (NHS). Both the Physician Organization and the Hospitals affiliated with NHS have been recognized for the quality of care they provide to their patients.

About Blue Cross Blue Shield of Massachusetts
Blue Cross Blue Shield of Massachusetts was founded 73 years ago by a group of community-minded business leaders. Today, headquartered in Boston, BCBSMA provides coverage to nearly 3 million members, 2.5 million in Massachusetts. BCBSMA believes in rewarding doctors and hospitals for delivering safe and effective care, and in empowering patients to take more responsibility, become educated health care consumers and become stronger partners with their doctors. Blue Cross Blue Shield of Massachusetts is an independent licensee of the Blue Cross Blue Shield Association.

 

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