Alternative
Quality
Contract

We believe that doctors and hospitals should be rewarded for delivering high-quality patient care and for helping to keep our members healthy.

In 2008, Blue Cross Blue Shield of Massachusetts developed an innovative way to pay for care that focuses on promoting quality and rewards positive health outcomes. Our Alternative Quality Contract now includes about 85 percent of the physicians and hospitals in the Blue Cross HMO network and more than 50 percent of the physicians and hospitals in the Blue Cross PPO network. The AQC is a crucial component of Blue Cross' mission to make quality health care affordable for members and employer customers, and it is the predominant contract model for Blue Cross and its network physicians and hospitals. The alternative payment model fosters shared responsibility for both improving care and constraining health care cost increases. The AQC is currently one of the largest private payment reform initiatives in the United States and has become a model for state and national policymakers.

Advancing the AQC and alternative payment models

In February 2019, the company announced, in conjunction with Atrius Health, the largest independent medical group in Massachusetts, a seven-year agreement. Under the agreement, the health plan and the provider group will align around an advanced alternative payment model to co-create a new kind of health care experience that's simpler, easier to navigate, higher-quality, and more affordable.

In January 2018, Blue Cross Blue Shield of Massachusetts launched a first-of-its-kind pilot program with South Shore Health System that moves private health plan reimbursement for hospitals away from the volume of care they provide patients to the value of care they provide. This program is an important complement to the AQC arrangement we have with most physicians. Under the program, the financial reward system for South Shore is be tied to its success in working with physician groups in its immediate geographic area — even those affiliated with a different hospital — to provide high-quality, cost-effective care, making the hospital a stewards of care in its community. Click here to learn more about this program.

Alternative Quality Contract Results

An October 2014 study in the New England Journal of Medicine (NEJM) shows that AQC has improved the quality of patient care and lowered costs in the four years since it was first implemented. The four-year study by Harvard Medical School researchers offers important lessons for payment reform efforts nationally. Watch this video to learn more about the results from the Harvard researchers.