title: Private-payer innovation in Massachusetts: the 'alternative quality contract'.
abstract: In January 2009 Blue Cross Blue Shield of Massachusetts launched a new payment arrangement called the Alternative Quality Contract. The contract stipulates a modified global payment (fixed payments for the care of a patient during a specified time period) arrangement. The model differs from past models of fixed payments or capitation because it explicitly connects payments to achieving quality goals and defines the rate of increase for each contract group's budget over a five-year period, unlike typical annual contracts. All groups participating in the Alternative Quality Contract earned significant quality bonuses in the first year. This arrangement exemplifies the type of experimentation encouraged by the Affordable Care Act. We describe this unique contract and show how it surmounts hurdles previously encountered with other global-payment models.
authors.affiliation: Harvard Medical School, Boston, Massachusetts, USA. Chernew@hcp.med.harvard.edu
authors.forename: Michael E
authors.initials: ME
authors.lastname: Chernew
authors.forename: Robert E
authors.initials: RE
authors.lastname: Mechanic
authors.forename: Bruce E
authors.initials: BE
authors.lastname: Landon
authors.forename: Dana Gelb
authors.initials: DG
authors.lastname: Safran
mesh_terms: D054598:Blue Cross Blue Shield Insurance Plans / Q000191:economics*; D003284:Contract Services; D017046:Cost Savings / Q000379:methods; D006801:Humans; D008329:Managed Care Programs / Q000191:economics*; D008404:Massachusetts; D009936:Organizational Innovation; D058991:Patient Protection and Affordable Care Act; D011787:Quality of Health Care / Q000191:economics*; D012052:Reimbursement, Incentive; D014481:United States