8/3/2019 Blue Cross PCP Cost log

1/2

1

Tiered PCP NetworkCost Measurement MethodologyBlue Cross Blue Shield of Massachusetts (BCBSMA*) Tiering OverviewPrimary care physicians (PCPs) were tiered at the practice group level. Tiering placements were based ona combination of quality and cost measures. Each group was initially placed in the Standard Benefit tierand moved to the Enhanced Benefit or Basic Benefit tier based on cost and quality performance. Qualitymeasures include a set of indicators reflecting nationally accepted and validated measures in two broadcategories: Clinical Process and Patient Care Experience. Performance on cost was based on health statusadjusted total medical expense per member per month (PMPM). Final tiering designation was based on acombination of cost and quality performance. This document explains the methodology for the costmeasures.

Cost Scores Used for TieringMetric: Health Status (HS) Risk-Adjusted Total Medical Expense (TME) per member per month

(PMPM) TME incorporates both fee-for-service and non-fee-for-service (e.g., incentive bonuses,

management fees and risk surplus/deficit) expenses. The HS Adjustment uses DxCGs concurrent-explanation model.

Data: HMO/POS fully insured and self insured populations with claims incurred 7/1/2006 6/30/2007

and paid through 11/2007 Claims for members who incurred $100k+ in claims in the measurement period are capped at

$100k.

Methodology (see example below): PCPs are tiered at the group level (one or more providers), based on the Group Provider Listing. Provider groups are separated into five geographic regions: Greater Boston, Northeast, Southeast,

Central, and Western. For each group, the risk-adjusted TME is evaluated and benchmarked separately for pediatric

patients (age 0-17) and adult patients (age 18+). The risk-adjusted TME for the groups pediatric patients is compared to the risk-adjusted TME

for the regions pediatric patients to calculate the groups pediatric cost score. The risk-adjusted TME for the groups adult patients is compared to the risk-adjusted TME for

the regions adult patients to calculate the groups adult cost score.

Cost scores are normalized such that both the regional and adult regional benchmarks are set to1.0. The groups pediatric and adult efficiency scores are blended by the respective pediatric and adult

membership to calculate the groups overall cost score.

Provider

Group

% Pediatrics

(Membership)

Pediatric Cost Score:

(Group HS-Adj TME) /(Region HS-Adj TME)

% Adults

(Membership)

Adult Cost Score:

(Group HS-Adj TME) /(Region HS-Adj TME)

Overall

Cost

Score

A 75% 0.5 25% 1.0 0.63

B 25% 0.5 75% 1.0 0.88

C 5% 2.5 95% 1.1 1.17

*BCBSMA comprises Blue Cross Blue Shield of Massachusetts, Inc., and Blue Cross Blue Shield of Massachusetts HMO Blue , Inc.

8/3/2019 Blue Cross PCP Cost log

2/2

2

Treatment of Insufficient Data: Groups with an average of fewer than 500 HMO/POS members over the measurement period are

considered to have insufficient data for reliable cost measurement. Groups with an average of 500 -1,000 HMO/POS members over the measurement period are

considered partially credible and will be treated as follows: The groups own experience will begiven an experience credibility percentage weight and the remainder of the weighting will beapplied to the regional average. The experience credibility percentage weight is based on thegroups membership and follows a linear scale with 500 members corresponding to 50 percentcredibility weight and 1,000 members corresponding to 100 percent credibility weight (seeexample below).

Group

Average

Membership

(B) GroupOverall Cost

Score

(C) RegionalAverage Cost

Score

(D) GroupExperience

Weight

(E) RegionalAverage

Weight

(B*D + C*E)Credibility Weighted

Overall Cost Score

A 700 1.20 1.00 70% 30% 1.14

B 850 0.90 1.00 85% 15% 0.92

Performance Benchmark for Cost Measurement: High-performance benchmark: Overall Cost Score less than 0.96

Potential for placement in Enhanced Benefit Tier Low-performance benchmark: Overall Cost Score exceeding 1.10

Placement in Basic Benefit Tier

PEP-3076K (4/08)