Managed outliers through winsorization. Outliers were identified as those values for
which costs were the top 2 percent and bottom 2 percent of episode costs
(geographically adjusted medical claims with age adjusted pharmacy costs). Outlying
cost values were truncated to these points, to preserve their considerations in
calculating the overall episode cost estimate, while moderating their influence.
Calculated a Cost Ratio by taking the mean of the episode costs within each
procedure type and dividing it by the overall mean episode cost.
The Cohort/Case Mix Adjustment Factor (which is the inverse of the Cost Ratio) is
multiplied by each provider’s adjusted and winsorized provider episode costs for
each procedure combination to normalize for procedure and benefit type, resulting in
a final episode cost that is both geographically, age, and cohort adjusted.
Establishing the Cost Measure
Each provider being evaluated has a number of fertility procedure episodes attributed to
that provider, based on the trigger events that occurred at that provider’s location, for each
of the three procedure types that were adjusted into a single IVF clinical category. For the
IVF clinical category, the median value of the adjusted expected episode costs for that
Provider is called the Clinical Category Provider Cost (CCPC). Each provider will have a
single Clinical Category Provider Cost (CCPC) for all IVF procedures performed.
Confidence intervals (90 percent) were calculated around each Clinical Category Provider
Cost (CCPC). The Upper Confidence Limit (UCL) of the Clinical Category Provider Cost
(UCL of CCPC) for the clinical category (above) was divided by the national benchmark, to
calculate the Clinical Category Provider Cost Index (CCPCI).
Using the Clinical Category Provider Cost Index (CCPCI) value, an overall Composite
Provider Cost Index (CompPCI) was calculated for the provider. Since there is only a
single clinical category for the Fertility Cost of Care evaluation, the combined cost index
results will match the individual IVF clinical category results prior to rounding. The
combined cost index of the median UCL was rounded down, to the nearest 0.025, in order
to give providers the benefit of the doubt and to avoid situations where a provider very
narrowly missed BDC+ eligibility by an immaterial margin.
The CompPCI was then divided by the national median to normalize/standardize the
values. While this does not change the results in any way, it allows for greater
transparency by having a CompPCI of 1.0 equivalent to the national median with values
greater than 1.0 indicating more expensive providers and values less than 1.0 indicating
more efficient providers. In the final step, the CompPCI was compared to the National Cost
Selection Criteria to achieve the final cost evaluation decision.
Overlapping Service Area
For providers in CA, ID, NY, PA, and WA, who may lie in overlapping areas served by
more than one local Blue Plan, the same method for cost evaluation was used but the
claims data and results were evaluated separately for each of those local Blue Plans,
resulting in two evaluations for cost of care; and their own Local Blue Plans decide whether
one or both cost of care evaluation(s) must meet BDC+ national criteria.
About This Document .......... 1
About the Blue Distinction
Specialty Care Program ....... 1
Executive Summary ............. 1
Understanding the Evaluation
Process.................................. 2
Quality Selection Criteria..... 4
Business Selection Criteria . 5
Cost of Care Selection Criteria
................................................ 5
Questions .............................. 8