BCBS of Minnesota launches new payment model with four health systems
Blue Cross and Blue Shield of Minnesota has launched a "shared incentive" payment model with four of Minnesota's largest care systems. The model modifies fee-for-service payments to reward quality of care and innovative methods of delivering cost-effective care.
"This new model rewards healthcare providers when they deliver high quality care and innovations in care delivery," said Patrick Geraghty, Blue Cross' president and CEO. "Traditional payment models have fallen short of addressing cost increases and have only minimally addressed quality goals. We needed to take a closer look at the process and find a solution that keeps the focus on the great care for which Minnesota providers are known -- and away from negotiations too focused on volume and rate levels."
Blue Cross has signed agreements with Allina Hospitals & Clinics, Essentia Health, Fairview Health Services and the HealthEast Care System. In the shared incentive model – which closely mirrors that of an accountable care organization – physicians, clinics and hospitals continue to get paid a basic rate, as in the traditional fee-for-service structure. However, over the length of the agreement, the focus is less on guaranteed rate increases and more on incentive payments tied to measurable improvements in quality and reductions in the overall cost of care.
"It's clear that the healthcare industry must move toward a model that places a premium on quality outcomes, maintaining health and providing excellent service," said Kenneth H. Paulus, president and CEO of Allina Hospitals & Clinics. "This partnership with Blue Cross does exactly that by paying providers like Allina for keeping quality high and costs under control."
To help providers improve their care delivery, Blue Cross – which is the largest payer in the state with more than 2.7 million members – will share data to help the providers identify and address cost drivers and quality gaps in their practices. Special attention will be paid to the treatment of chronic conditions, such as diabetes, heart disease and hypertension.
"We are moving to implement aspects of this new model in all of our provider relationships," said Jim Eppel, senior vice president of health management and commercial markets, at Blue Cross. "This new approach is not a traditional contract negotiation process, but rather a multi-year partnership model where the health plans and providers work to effectively share knowledge and manage risk in order to create value."
According to Blue Cross, the specifics of the agreements vary by care system, but all have the same approach with a focus on quality of care. It's a focus that aligns easily with changes some healthcare providers have already begun making in their practices.
"Patients and payers are demanding greater value. That's why we've been working so hard to redesign the way we provide care," said Mark Eustis, Fairview's president and CEO. "The good news is we're already beginning to see results demonstrating improved clinical outcomes, a better patient experience and reduced total cost of care. This is the right work. It's rewarding work and it's the work of the future."
