Physicians can double base reimbursement via incentives for providing efficient care

Independence Blue Cross (IBC), a health insurer in southeastern Pennsylvania, released promising results this week from a physician incentive program it introduced in 2010. IBC’s Quality Incentive Payment System (QIPS) allows primary care doctors to double their base reimbursement as a reward for improving the quality of care and providing care in a more efficient way.

IBC issued $37 million to physicians under QIPS in 2011, the largest incentive amount the insurer had ever paid primary care doctors.

“We believe that by building a strong partnership with the physicians and hospitals that care for our members, we can — together — transform the delivery of healthcare in our region,” said Daniel J. Hilferty, IBC president and CEO, in a prepared statement. “Through our path-finding, highly rewarding incentive program for primary care physicians we are setting a new standard among health insurers nationally for progressive payment programs that reward the medical community for delivering the best possible care to members in the most cost-effective way.”

One of the more than 3,000 physicians eligible to participate in this incentive program is Richard Wender, chairman of the Department of Family and Community Medicine at Thomas Jefferson University in Philadelphia. “If every insurer were doing what IBC is doing" with primary care incentives, he said, "this would provide a much better chance for primary care to truly transform healthcare for the nation.”

“I appreciate the collaboration I have with Independence Blue Cross,” added Wender. “IBC understands the pivotal role that primary care physicians play in the health of its members — and they have created a way to demonstrate this commitment through their enhancements to maximize QIP’s effectiveness. Stronger incentive programs help physicians, hospitals and health insurers work more closely to encourage adoption of healthy lifestyles, uptake of preventive care and better chronic care management.”

Through QIPS, IBC began offering additional financial rewards to primary care practices that meet some or all of the National Committee for Quality Assurance’s core requirements to become a nationally recognized Patient-Centered Medical Home. Medical homes use a team approach and support the primary care physician with health educators, nurse practitioners and other healthcare professionals. Patients cared for in a medical home typically have more timely access to their physicians. In addition, the practices are organized so that care managers and health educators help chronically ill patients receive key tests, take medication as directed and maintain their optimal health status.

“We are proud that we are one of the first health insurers in the country to successfully integrate medical home incentives into our physician incentive program,” said Hilferty. “Since the beginning of 2011, the number of recognized medical home practices in our networks has more than tripled to nearly 200 in southeastern Pennsylvania, bringing this revolutionary delivery of care to more than half a million IBC members.”

In addition to earning pay for running their practices as medical homes, doctors can earn QIPS incentives based on achievements in the following areas:

  • Coordinating cost-effective care. In the first year of the revised incentive program, roughly 20 percent of eligible physicians achieved top-tier performance by delivering the highest level of cost-effective care through improved coordination of care for their patients’ physician visits, lab tests and other outpatient services. The program’s medical-cost performance targets are based on the average cost and use of health services of each physician’s patient population. IBC’s analysis has shown that if every eligible physician achieved top-tier status, medical cost spending in the Philadelphia area could be reduced by an estimated $60 million, and high-performing physicians would be rewarded an additional $20 million in incentives.
  • Prescribing generic drugs. IBC’s primary care incentive program has long-rewarded physicians for prescribing generic equivalent drugs instead of higher-cost brand name drugs. Over the past decade, IBC has seen a 63 percent increase across all primary care specialties in generic drug prescribing rates. Increased use in generics translates to increased savings for consumers and private and public insurers. According to the U.S. Food and Drug Administration, generic medications can cost consumers up to 80 percent less than their branded counterparts. Data from the Centers for Medicare & Medicaid Services show that for every 2 percent increase in generic use, Medicaid saves an additional $1 billion annually.
  • Delivering quality care. Physicians participating in the incentive program performed at or above the 75th percentile benchmark in 20 quality performance measures that address a broad range of important health concerns (such as heart disease, asthma and diabetes) and preventive measures such as cancer screenings.

IBC officials noted that programs that provide effective clinical preventive and chronic management services can improve patient health and wellness, as well as mitigate the need for higher-cost interventions and care such as hospital stays and emergency department visits.

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