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Patient-Centered Medical Home Program Trims Expected Health Care Costs by $98 million in Second Year

Health Care Costs for 1.1 Million CareFirst BlueCross BlueShield Members Covered by the Program 2.7 Percent Lower than Projected

Baltimore, MD  (June 06, 2013) - In the second-year (2012) of one of the nation’s earliest, large-scale Patient-Centered Medical Home (PCMH) programs, health care costs for 1 million CareFirst BlueCross BlueShield (CareFirst) members covered by the effort were $98 million less than the company projected. The results represent a savings of 2.7 percent on the total projected 2012 health care costs for PCMH-covered members and improve upon the 1.5 percent savings against projected costs registered by the program in 2011.

Approximately 66 percent of participating primary care panels – groups of physicians that join together to participate in the PCMH program – earned increased reimbursements for their 2012 performance in the program. Increased reimbursement levels – or Outcome Incentive Awards (OIAs) – are based on a combination of savings achieved by a particular panel against projected 2012 total care costs for CareFirst members and performance on quality measures related to the provision of care to the panel’s patients.

“These results are encouraging,” said CareFirst President and CEO Chet Burrell. “The PCMH program was designed with the goal of bending the health care cost trend, and our 2nd year results suggest that program is having just such an impact. In addition, more participating panels achieved savings and the vast majority of those who did so in 2011 were able to sustain those results in 2012. It is a measurable and meaningful step in the right direction of slowing the rise of health care costs.”

Currently, nearly 3,600 primary care providers (primary care physicians and nurse practitioners) participate in CareFirst’s PCMH program. One hundred-ninety six of the 297 eligible panels (66 percent) earned OIAs for the 2012 program year; 60 percent of panels earned OIAs in the program’s first year. The level of OIA for each Panel is based on both the level of quality and degree of savings achieved by the participants of the Panel.

2012 PCMH program highlights:

  • Primary care panels earning OIAs achieved an average 4.7 percent savings against expected 2012 care costs.
  • Panels that did not earn OIAs registered costs that averaged 3.6 percent higher than expected in 2012; an improvement over 2011 performance when panels that did not earn an OIA recorded costs 4 percent higher than expected.
  • 74 percent of panels that earned OIAs in 2011 earned them again in 2012, meaning their patients registered lower than expected total health care costs for two consecutive years.
  • On average, Panels earning OIAs will see an increase in their reimbursement level of 29 percentage points. This increase is in addition to a 12 percentage point increase paid to all participants that continue to remain in good standing in the PCMH program.
  • Quality scores for panels that earned OIAs were 3.7 percent higher than for panels that did not earn OIAs in 2012. Overall, quality scores for PCMH panels rose by 9.3 percent from 2011 to 2012 – a significant one year increase.

“While the numbers are important, they don’t tell the entire story,” said Burrell. “We are now well into the 3rd year of the PCMH program, and we have created an infrastructure of nursing support, easily-accessible online tools and data, and targeted health programs that make it possible for primary care providers to more effectively manage care for their sickest patients in a more coordinated fashion than ever before. Thousands of our members are benefitting directly from this care coordination and that impact will grow substantially as the program matures.”

CareFirst launched its PCMH program in January 2011. Today, more than 1 million CareFirst members are patients of physicians participating in the PCMH program. Nearly 80 percent of all eligible primary care physicians in CareFirst physician networks participate in the PCMH program.

“The early success and promise of the PCMH program encouraged us to seek and secure an Innovation Challenge Grant from the Centers for Medicare and Medicaid Services to expand the PCMH model to our area’s Medicare population,” said Burrell. “Medicare beneficiaries, who frequently have complex health needs and multiple chronic health conditions, could benefit greatly from the coordinated model of care offered through our PCMH. We expect to launch our CMS-funded Maryland Medicare PCMH pilot this summer and will continue to look for ways to expand the model.”


Additional Info:

News Release on 1st-Year PCMH Program Results


About CareFirst

In its 76th year of service, CareFirst, an independent licensee of the Blue Cross and Blue Shield Association, is a not-for-profit health care company which, through its affiliates and subsidiaries, offers a comprehensive portfolio of health insurance products and administrative services to 3.4 million individuals and groups in Maryland, the District of Columbia and Northern Virginia. In 2012, CareFirst contributed $57 million to community programs designed to increase the accessibility, affordability, safety and quality of health care throughout its market areas. To learn more about CareFirst BlueCross BlueShield, visit our website at www.carefirst.com or follow us on Twitter: http://twitter.com/CareFirst_News.