Minnesota Blue's new contracting model geared toward ACO development

Blue Cross and Blue Shield of Minnesota has recently signed up eight large health systems under an aligned incentive model, a critical milestone in the health plan's strategy of fostering an accountable care organization.

The contracts aren't set to take effect for at least a year which will allow its current agreements expire, according to Anudeep Parhar, vice president for technology strategy and planning for the Minnesota Blue.

BCBSM's aligned incentive contracting moves away from short-term contracts built on a unit payment, for fee-for-service model to three-year contracts with reimbursement based on risk from illness burden and complexity. Over time, more of the paymenst will be based on quality and cost improvement.

[See also: Private payers can show bundled payment value to wary providers; Minnesota payer-provider ACO reports first year savings of $6M.]

Although the model requires plenty of cutting-edge technology, databases and analytics, it also depends on relationship-building and leadership. The change in negotiations was a critical step.

Previously, Parhar noted, contract negotiations involved the insurer's medical directors presenting providers "with literally thousands of color-coded sheets of paper" for different categories of information.

"Now, because of the systems we have built and the relationship between our CEO and, for example, a care system CEO, we have agreed that we will share the data, and we will take the time to load the systems with particular data so that all of us can preview it collectively," Parhar said at a Nov. 8 conference on healthcare innovation and technology.

With the former approach to negotiating contracts, the insurer would just tell providers why they were not going to be paid as much. "Now, it's more collaborative. It's based on the data. And leadership is involved. But it's still not where we'd like it to be yet," he said.

Because provider payment will be increasingly based on quality instead of quantity, the Blue has developed a roadmap to data integration and information exchange between the providers and the payer. This includes technologies to increase accessibility and use of more and different data to better manage costs, improve efficiency and make the most of financial and clinical outcomes.

"But it's still very much a framework and strategic intent at this point," Parhar said.

To move toward accountable care models, BCBSM must move from a monolithic IT architecture to a hybrid one. The insurer will move from transaction-based and batch-oriented solutions to near real time.

On the business side, the plan is advancing its health management and data analytics capabilities and increasing the number of data integration points with third parties, he said.

The insurer also will focus more on consumer experience and satisfaction. This will include expanding beyond traditional insurance product to creating a retail experience of integrated and personalized services both to engage members and to help consumers make high-value decisions about health care and behavior.

Zachary Meyer, vice president of wellness and prevention at CBSM, said that insurers need to reshape how to conduct and measure consumer engagement because it can help shape consumer behavior.

"Disease management that traditionally has been the responsibility of health plans is going to be moving to the broader community. We are seeing a significant shift because of how health reform will change purchasing behaviors," he said.

Member engagement can come through health assessments, lifestyle coaching and disease management programs. Insurers can also direct reminders to the member at the point of purchase, such as when grocery shopping, through mobile applications and other technologies, Meyer said.

Over the next three years, the insurer will license and integrate new capabilities before it builds new software. It will also mine, buy and collect member and non-member information and design for quick integration of systems and data with partners and customers, Parhar said. 

Data analytics is evolving from static reports and retrospective and transactional claims data to providing reports that share claims and payment discrepancies, reviews case management and practice utilization patterns and maximizes preventive care opportunities. These new data sets also allow employers to understand and anticipate how to better manage future healthcare system use by their employees.

In order to accomplish all this, BCBSM will employ a data warehouse approach it calls its data general ledger, which uses a data integration engine that will apply data quality rules, be the home of enterprise measures, "the single source of truth," and support split-second responses to questions, he said. However, all of these capabilities are yet to be built.

"Right now the ledger is about a few of the key business measures that as a plan we need to operate on. The ledger has to be one set of measures that have been agreed upon among all business units," Parhar said.