Blue Shield of California outpatient payment program

Faced with major increases in the cost of outpatient medical care, Blue Shield of California initiated an effort to develop and implement a prospective payment system that could be used for contracting with hospitals and freestanding facilities. Utilizing an outpatient classification system designed to categorize outpatient visits with similar clinical characteristics as well as similar resource consumption, Blue Shield introduced a negotiated case rate system of payment for outpatient surgical care. This article will review the background of the project, the methodology used to implement the system, and the results achieved from its implementation.