CareFirst Blue Cross and Blue Shield, Baltimore, reported that about 60% of the small teams of primary-care physicians and nurse practitioners participating in its Patient-Centered Medical Home program met quality and cost goals and will start receiving increased fees for certain services starting July 1.

Just fewer than 1 million patients from Maryland, Washington, D.C., and northern Virginia are enrolled in the program, which created panels of five to 15 providers who developed and followed up on care plans for individuals identified by CareFirst as having or being at risk for having multiple chronic conditions.

CareFirst President and CEO Chet Burrell said in a conference call that the physicians were told to take care of the patients "who need (them) the most" so they could ease the "cycle of breakdown" that leads to hospital admissions and readmissions and emergency department visits. Targeted patients included those who have, for example, not only diabetes but also hypertension, obesity and arthritis and who take 10 or more medications, Burrell said.

According to Burrell, the patients targeted for care plans make up less than 10% of CareFirst's membership but account for nearly 30% of all claims paid out.

Incentives included $200 for developing a patient's care plan and $100 for conducting a follow-up "maintenance" visit to evaluate how well the patient's care plan was working. In addition, providers received a 12 percentage-point increase in service fees for participating in the program. For example, a service fee of $100 increased to $112 for participating providers, a CareFirst spokeswoman explained in an e-mail.

Of the approximately 300 panels operating as part of the program, Burrell said 253 were eligible for "outcome incentive awards," and 151 met the OIA goals. On average, those participants will receive a 20 percentage-point increase in reimbursement levels for 12 months starting July 1, he said.

"The whole idea is that incentives affect behavior," Burrell said, adding later that because the current healthcare system incentivizes volume, "we've gotten volume."

As a base for financial-savings targets, Burrell said CareFirst looked at costs for 2010 and estimated that they would increase by 7.5% in 2011—which he said they did, equaling $2.5 billion for healthcare claims paid for 2011 services.

According to Burrell, most panels saw between 2,500 and 3,500 CareFirst members who collectively accounted for $10 million to $12 million in healthcare costs. He estimated that about 5% or $600,000 of that figure goes toward primary-care services. So, with the bonus, the panel might see additional payment totaling about $120,000.

He said the average savings realized by the panels who met targets was 4.2%. Those that didn't exceeded expected costs by an average of almost 4%. Together, total savings for the program equaled 1.5%

Given the $2.5 billion figure for total paid claims in 2011, Burrell described the savings as "very substantial" and noted that the program, which was launched last year, is expected to last for several years and that improvement is expected to continue.

CareFirst provided technical assistance and health information technology tools such as the American College of Physicians' Medical Home Builder 2.0 software program free of charge.