Health Care Spending and Quality in Year 1 of the Alternative Quality Contract

In 2009, Blue Cross Blue Shield of Massachusetts implemented a global payment system, the Alternative Quality Contract (AQC). In the first year, the AQC was associated with reduced growth in medical spending; estimated payments to AQC groups exceeded estimated savings. The growth of health care spending is a major concern for households, businesses, and state and federal policymakers. 1 – 3 In response to the continued growth in spending in Massachusetts after health care reform, Blue Cross Blue Shield of Massachusetts (BCBS), the state's largest commercial payer, implemented the Alternative Quality Contract (AQC) in January 2009. 4 The AQC is a contracting model that is based on global payment and pay for performance. It is similar to the two-sided model for accountable care organizations specified by the Centers for Medicare and Medicaid Services (CMS) in its proposed regulations for those organizations. 5 Global payment . . .