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Independence Blue Cross Adds $47M in New Physician Payment Model

John Commins, for HealthLeaders Media, April 30, 2010

Independence Blue Cross will offer $47 million in pay raises for primary care physicians in its southeastern Pennsylvania provider network, including $33 million to incentivize better patient outcomes, the Philadelphia-based health insurer announced today.

IBC said the added money will allow the 1,800 primary care physicians in that network to double their incentive earnings over last year's program by providing better care to IBC's commercial and Medicare Advantage HMO and Point-of Service members. The changes in reimbursement will attract and retain high-performing primary care physicians, IBC added. At the same time, IBC said it is “modifying” reimbursements for costlier, episodic, specialty care services, which the insurer said can often be avoided with regular, effective preventive care.

IBC said it was moved to raise the incentives in light of numerous studies that have linked improved outcomes and health to patients who are directly connected to their primary care physicians.

"IBC is a strong advocate for changing the healthcare system to enhance the affordability and quality of healthcare," IBC President/CEO Joseph A. Frick said. "Real and sustainable healthcare reform includes collaborating with our physician and hospital partners by enhancing incentives for providing safer, higher quality, and more cost-effective care—rather than just more care. That's what these changes are all about and they demonstrate our commitment to help people stay well, and encourage better coordination of care when our members become ill."

Beginning July 1, IBC's compensation for primary care physicians will include three components:

  • Base reimbursement. IBC will raise pay to network primary care physicians by an average of 10%—the largest pay raise IBC has given in the last five years.
  • Incentives for improving clinical quality outcomes while improving patients' education and access to care. The Quality Incentive Payment System will reward primary care physicians who improve the quality of care compared to national standards of quality care through proper blood sugar testing, cholesterol screening, eye exams for diabetics, and other measures such as breast, cervical, and colorectal cancer screenings, childhood and adolescent immunizations, and asthma and cardiovascular management. The incentives reward physicians' performance on process measures and quality outcomes compared to peers in the same primary care specialties. The highest performing physicians get the highest reimbursements.
  • Incentives for managing medical costs. The supplemental money incentivizes physicians to improve care coordination, and to take the time to discuss with patients the risks and benefits of certain procedures or treatment, and to help patients understand the value of the treatment–for example, understanding the benefits of non-invasive, conventional treatment versus a diagnostic or invasive procedure.

John Commins is a senior editor with HealthLeaders Media.

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