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Capitation Rates & Data, April 2008

Blue's model may breathe new life into global cap

Go back to basics when negotiating new cap contracts

Hospitalist care reduces LOS in various inpatient settings


Blue's model may breathe new life into global cap

In a move that's surely being watched by payers in other states, Blue Cross Blue Shield of Massachusetts (BCBSMA) in Boston plans to stop paying certain doctors and hospitals in its statewide network for each patient visit or treatment and return to capitation.

BCBSMA's alternative quality contract (AQC) represents a new spin on traditional capitation, marrying a global PMPM rate for all physician and hospital services with annual inflation increases and performance incentives linked to nationally accepted measures of quality, effectiveness, and patient satisfaction. Rather than focusing exclusively on cost control-a payer-imposed goal that drove scores of ill-prepared physician practices out of business during the 1990s-the model is designed to help align payment reform, performance measurement, provider and member incentives, and increased cost and quality transparency.