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Insurer to Double Payments Tied to Quality and Cost Measurements

By Rebecca Adams, CQ HealthBeat Associate Editor

July 10, 2013 -- UnitedHealthcare plans to more than double the amount of its reimbursements that are tied to quality and cost-effectiveness, bringing the value of its contracts that are linked to quality measurements to $50 billion by 2017, the company recently announced.

Already more than $20 billion of UnitedHealthcare's payments to providers, such as hospitals and physicians, are paid through contracts that tie part of the payment to measurements of quality and cost-efficiency.

UnitedHealthcare—which provides coverage for more than 40 million people through private insurance, Medicaid and Medicare—said that it has seen strong success from using quality and cost-control metrics. The company said that using patient-centered medical homes, in which a physician coordinates the care of patients, reduced the growth of medical costs by up to 4.5 percent.

The company is including in its projections three main types of programs:

  • Performance-based payments, such as bonuses for primary care practices, or performance-based contracts with hospitals, physicians and other providers that reward them for improving patient medical outcomes and lowering costs.
  • Centers of Excellence programs, in which payments are bundled for specific treatments or procedures, such as organ transplants, rather than charging for each visit or drug.
  • Accountable care organizations and medical homes, in which the medical provider would get to share in any savings that result from better overseeing patients' care.

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