Blue Cross Blue Shield of Massachusetts Signs First Groups to Its New Alternative Quality Contract

Innovative contract will improve quality and moderate costs
BOSTON--(Business Wire)--
Blue Cross Blue Shield of Massachusetts, Inc. (BCBSMA) today announced it has
signed its first provider groups, Mount Auburn Hospital (MAH) and the affiliated
Mount Auburn Cambridge Independent Practice Association (MACIPA), and Hampden
County Physician Associates, LLC (HCPA), to its new 5-year Alternative Quality
Contract (AQC). First offered in 2008, the AQC pays doctors and hospitals based
on the quality and outcome of the care they provide to patients. The AQC is
designed to improve the quality of care our members receive and cut current
annual medical cost trends in half.

"Today`s announcement reflects the shared vision by BCBSMA and our physician
partners at MACIPA and HCPA of a health care system that delivers safe,
effective and affordable care," said Cleve Killingsworth, BCBSMA`s Chairman and
Chief Executive Officer. "BCBSMA believes the most promising way to moderate the
increase in the cost of care is to improve quality. The most effective way to do
that is to pay doctors and hospitals for the quality and outcome of their care."

Jeanette Clough, President and CEO of Mount Auburn Hospital, said "Mount Auburn
Hospital has been at the forefront of the patient quality and safety movement.
We`re excited to be partnering with BCBSMA in this new, innovative contract that
bases payments on the quality, not quantity of care."

The new contract is a joint relationship with Mount Auburn Hospital and its
affiliated physicians group MACIPA. MACIPA`s President Dr. Barbara Spivak said,
"we were pleased to be able to work collaboratively with BCBSMA and Mount Auburn
Hospital on this Alternative Quality Contract. MACIPA and MAH have partnered for
many years on innovative programs to improve the care provided to our patients.
This contract aligns well with our mission to provide the highest quality care
to our patients. Our quality improvement department supports our physician
practices in caring for their sickest patients and ensuring that more patients
have the preventive tests and appointments that will keep them healthy."

Today`s announcement also includes BCBSMA`s separate agreement with 45 doctors
in Western Massachusetts who are part of HCPA. HCPA`s CEO Robert Suchecki said,
"We are pleased to be one of the first physicians` practices in the state to
sign this contract which is consistent with our commitment to deliver high
quality, cost effective care to our patients."

State Senator Richard Moore, Senate chairman of the Legislature`s Health Care
Financing Committee, said "I applaud Blue Cross and Blue Shield, Mount Auburn
Hospital, MACIPA and HCPA for the collaborative spirit that led to these new
contracts. This initiative will continue to push us to a higher standard in
health care, and it is my hope that we will also see a drive forward in health
care technologies including electronic prescribing, and usage of electronic
medical records."

One of the nation`s leading authorities on health care quality said BCBSMA and
the physicians groups are paving the way for a better future for patients,
providers, and payers. Don Berwick, President and CEO of Institute for
Healthcare Improvement based in Cambridge, Massachusetts, said "it is innovative
and welcome news when health care providers and an insurance company are willing
to partner to create an alternative payment system based on improvement in
quality. We need funds to flow so as to reward providers far more sensibly than
our traditional, broken fee-for-service system does."

About the Alternative Quality Contract

The AQC is a significant change from traditional fee-for-service contracts. It
combines two forms of payment. The first is a global, or fixed, payment per
patient adjusted for age, sex, and health status which increases annually in
line with inflation. The second payment includes substantial performance
incentives tied to the latest nationally accepted measures of quality,
effectiveness, and patient experience of care. The contract`s global payment
covers all services received by a patient including primary, specialty, and
hospital care. So, when a doctor spends more time with a patient and helps the
patient avoid an unnecessary hospitalization, the patient receives better care,
the doctor and hospital have the potential to receive performance incentives,
and the overall costs are less. Employers benefit as the new system moderates
cost increases through better care. You can read more about the AQC by visiting
www.bluecrossma.com/quality.

Background Information

The Alternative Quality Contracts with MACIPA and the HCPA apply to BCBSMA`s HMO
Commercial products and impact:

* More than 24,000 Blue Cross Blue Shield of Massachusetts HMO members
* More than 300 MACIPA physicians; 45 HCPA physicians

Founded in 1886, Mount Auburn Hospital is a teaching hospital of Harvard Medical
School. Its mission is to deliver healthcare services in a personable,
convenient and compassionate manner, with respect for the dignity of patients
and their families.

Founded in 1985, The Mount Auburn Cambridge Independent Practice Association
(MACIPA) includes Primary Care Physicians in family practice, internal medicine
and pediatrics; PCP/Specialists; and sub-specialists in 36 different medical and
surgical sub-specialties.

Founded in 1974, Hampden County Physician Associates, LLC is a multi-specialty
group practice headquartered in Springfield with offices throughout Western
Massachusetts.

Blue Cross Blue Shield of Massachusetts (www.bluecrossma.com) was founded more
than 70 years ago by a group of community-minded business leaders. Today,
headquartered in Boston, BCBSMA provides coverage to more than 3 million
members, 2.5 million in Massachusetts. BCBSMA believes in rewarding doctors and
hospitals for delivering safe and effective care, and in empowering patients to
take more responsibility, become educated health care consumers and become
stronger partners with their doctors. Blue Cross Blue Shield of Massachusetts is
an independent licensee of the Blue Cross Blue Shield Association.

Blue Cross Blue Shield of Massachusetts
Jay McQuaide, 617-246-2365
Jay.McQuaide@bcbsma.com
or
Mount Auburn Hospital and MACIPA
Michael O'Connell, 617-499-5699
moconnel@mah.harvard.edu
or
Hampden County Physician Associates
Robert Suchecki, 413-733-3470 x104
suchecki@hampdencountyphysicians.com

Copyright Business Wire 2009