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Blue Cross Blue Shield of Massachusetts and Beth Israel Deaconess Physician Organization Sign Alternative Quality Contract

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

The largest physician group to-date signs onto this innovative global payment model

BOSTON — December 10, 2010 — Blue Cross Blue Shield of Massachusetts, Inc. (BCBSMA), a locally-based, community-focused health plan, and Beth Israel Deaconess Physician Organization (BIDPO), an independent physician network affiliated with Beth Israel Deaconess Medical Center, today announced they have signed a multi-year Alternative Quality Contract (AQC). The AQC, a modified global payment model, is designed to encourage cost-effective and patient-centered care by paying participating physicians and hospitals for the quality, not the quantity of the care they deliver to patients (see attached fact sheet for additional details).

With nearly 1,800 physicians, BIDPO, affiliated with a major tertiary hospital, is the largest physician organization to join the AQC to-date. The BIDPO network includes hospital and community-based physicians who practice at BIDMC, BIDH-Needham, Milton, Anna Jaques, Merrimack Valley and Lawrence General Hospitals, as well as physicians who utilize hospitals on Cape Cod, in Norwood, Brockton and the MetroWest area. The agreement announced today covers approximately 75,000 BCBSMA members. With the addition of BIDPO, approximately 40 percent of BCBSMA's Massachusetts-based HMO members are provided care by physicians in an Alternative Quality Contract.

"We're looking forward to collaborating with Beth Israel Deaconess physicians on our shared goal of improving the quality and affordability of patient care," said Andrew Dreyfus, President and Chief Executive Officer of Blue Cross Blue Shield of Massachusetts. "Payment models like the AQC are a crucial component of our broader strategy to make quality health care affordable for our members and employer customers. We believe it is very significant that in the AQC, participating physicians and hospitals have agreed to share responsibility and accountability for improving care and moderating the unsustainable rate of increase in health care costs."

"BIDPO physicians are completely dedicated to patient centered care and we believe this new Alternative Quality Contract is an excellent way for us to meet our goal of providing patients the right care in the right place at the right time," said Stuart Rosenberg, MD, BIDPO's President and Chief Executive Officer.

"With nearly 500 primary care physicians and 1,300 specialists, aligned across the entire spectrum of care, we are confident this contract will result in the best health care and outcomes for our patients," added Richard A. Parker, MD, BIDPO's medical director and an internist at Beth Israel Deaconess Medical Center.

"We're encouraged by the rapid adoption of the AQC which has grown to include one third of our HMO physicians in less than two years," added Patrick Gilligan, Senior Vice President of Health Care Services for BCBSMA.

The AQC is one of the largest private payment reform initiatives in the country and is an example of the kind of innovative payment models encouraged by the new federal health care reform law. This model also aligns with the focus on payment reform in Massachusetts that Gov. Deval Patrick has indicated will be a major priority of his Administration next year. Governor Patrick's focus follows the Massachusetts Special Commission on Payment Reform's unanimous vote to move toward a global payment system as the best opportunity to moderate costs while promoting high-quality care.

The AQC is a significant change from traditional fee-for-service contracts. It includes a global, or fixed, payment per patient adjusted for age, sex, and health status as well as payments tied to performance on nationally accepted measures of quality, health outcomes, and patient care experiences. 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 successfully manage a chronic medical condition, like hypertension or diabetes, the result is both improved health outcomes for the patient and lower overall costs by helping avoid exacerbations of the condition. Employers and employees/members benefit as the new system moderates cost increases and hence health insurance premiums through better care.

In the new BIDPO agreement, there are 32 specific quality measures, including the appropriate use of breast, cervical and colorectal cancer screening, pediatric and adolescent well visits; successful control of important chronic conditions such as diabetes and high blood pressure; as well as other measures that help keep patients healthy and make care more patient-centered. BIDPO physicians, BIDMC and many of the local community hospitals, where BIDPO physicians practice, will work closely together under the AQC to achieve the best care and cost outcomes for their patients.

About Beth Israel Deaconess Physician Organization
Beth Israel Deaconess Physician Organization, LLC (http://bidpo.org) is an independent physician network and contracting organization with nearly 1,800 providers and is affiliated with Beth Israel Deaconess Medical Center. Through coordinated, integrated medical management programs and managed care contracts, BIDPO promotes the highest quality of patient care, patient safety and cost effective care among its participating providers.

About Blue Cross Blue Shield of Massachusetts
Blue Cross Blue Shield of Massachusetts (www.bluecrossma.com) was founded 73 years ago and is now the largest private health plan in the state, providing coverage to nearly 3 million members. BCBSMA believes in working with physicians, hospitals, employers and the broader community to provide quality, affordable health care in Massachusetts. Blue Cross Blue Shield of Massachusetts is an independent licensee of the Blue Cross Blue Shield Association.

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