JAY GREENE February 24, 2020 11:11 AM
Blue Cross and
Blue Shield of Michigan has added seven health organizations to its
risk-sharing payment program, extending the insurer's Blueprint for
Affordability program to providers in all parts of lower Michigan.
Designed to cut
costs and improve quality, Blueprint began last
December with seven major Southeast Michigan health organizations agreeing to
participate in what is believed to be the state's first comprehensive
"two-sided" shared risk program.
Under the
five-year contracts, provider systems could gain additional revenue if they
lower costs and improve quality, the so-called upside risk arrangement. But the
14 participating health organizations could be forced under the downside risk
arrangement to refund payments to Blue Cross if annual total expenses for the
covered patients exceeds agreed-upon targets.
"I am proud
to welcome these provider organizations to our statewide partnership as we take
a stand for quality and affordability in health care," said Daniel Loepp,
CEO of the Michigan Blues, in a statement. "The power and value in
Blueprint for Affordability comes from everyone joining together to challenge
the status quo. Now throughout the Lower Peninsula, people will benefit from
higher quality health care at costs they can better manage."
The second group
of health organizations signing on to risk-sharing agreements with Blue Cross
include:
·
Ascension Michigan, including Genesys PHO, Flint, and St. Mary's
PHO, Saginaw
·
Trinity Health's Affinia Health Network, Grand Rapids area
·
Great Lakes OSC, Midland area
·
Holland Physician Hospital Organization, Holland area
·
Munson Healthcare Clinically Integrated Network, Traverse City
area
·
Northern Physicians Organization, Traverse City area
These health
organizations, accounting for about 9,000 providers, will join four health
systems already in the program. They are Ascension Health, Warren; Trinity
Health, Livonia; Henry Ford Health System, Detroit; and Michigan Medicine, Ann
Arbor. The three physician organizations are United Physicians, Bingham Farms;
the Physician Alliance, St. Clair Shores; and Oakland Southfield (Mich.)
Physicians.
Steve Carrier,
Blue Cross' senior vice president of network management and provider partner
innovation, said the seven additional health organizations reached out to Blue
Cross to participate in the program. He said the organizations have been
participating in the Blues' physician group incentive program, or PGIP, which
rewards physicians for improving quality and reducing unnecessary utilization.
"Independent
physicians are looking for ways to be successful and increase their income by
performance," Carrier said. "They (told us we) can win by doing this.
We have a better mousetrap."
In 2020, Carrier
said all 14 health organizations will be eligible for upside risk, which means
they can get bonus payments for hitting various targets. In year two, he said,
the downside risks will kick in and they could be subject to penalties. Blue
Cross said the program is intended to be budget neutral.
"(The first
group) are about two months into the program. So far, we have held training
sessions to learn what to expect. We set up population health meetings,"
Carrier said. "It will take the first year to get things going."
Shay Raleigh,
executive director of Great Lakes OSC, said joining Blueprint was the next step
in streamlining care to patients. "We've made great progress toward
coordinated care with our patient-centered medical homes, and we look forward
to building on that success," he said.
Dr. Peter Sneed,
president of Northern Physicians, also said coordinating care under PGIP has
prepared it to participate in a larger value-based program like Blueprint.
"Our goal is
to continue achieving the 'quadruple aim' of improved quality, reduced costs,
improved patient experience and improving the joy of practicing medicine,"
Sneed said. "Our patients will be healthier and benefit from better
outcomes and more manageable out-of-pocket costs."
Carrier said Blue
Cross has heard from other health organizations and likely will add more
systems this year, but they won't go under contract until 2021.
Mark Geary, a
spokesman for eight-hospital Beaumont Health in Southfield, said Beaumont is
studying the Blue Cross program.
"Blueprint
is a true risk-sharing model," Geary said in an email. "We are
carefully vetting and evaluating whether the program is ultimately in the best
interest of our patients before we decide whether to participate."
Similar to
Medicare "accountable care organization" and specialty physician
two-sided risk models, providers share in the savings but are also responsible
for some of the loss if spending is above the benchmark.
Experts believe
two-sided risk arrangements will become the norm over the next decade.
A small number of
health organizations have accepted downside risk arrangements, although the
numbers appear to be growing.
In a recent
analysis of Medicare ACOs, 33%, or about 200 of 600 ACOs, included downside
risk arrangements in their contracts in 2018, up from 28% in 2012, according to
a 2019 study in Health Affairs.
Effort at
boosting quality, lowering costs
As encouraged by
the Affordable Care Act, private and government payers have been attempting to
move providers away from higher-cost traditional fee-for-service reimbursement
system that rewards providers for higher utilization of services.
National studies
have shown that 30% of healthcare spending either is wasteful, duplicative or
unnecessary. U.S. healthcare costs are projected to rise 6% in 2020, up from
5.7% increases in 2019 and 2018, according to the PricewaterhouseCoopers Health
Research Institute. Still, those numbers are far below the 12% increase in 2007
and 9% increase in 2010 before the ACA was fully implemented.
But because
healthcare cost increases have failed to fall below the 5.5% low of 2017,
employers and individuals feel more needs to be done to contain costs that far
exceed salary growth.
Over the past few
years, as payers have tried to use various methods to contain costs, including
utilization review, prior authorization and high-deductible health plans,
hospitals and physician organizations have been preparing to accept more
value-based reimbursement arrangements.
Over the past 15
years, Blue Cross has used value-based reimbursement arrangements with
hospitals and physicians to save customers more than $2.2 billion. At the same
time, quality and outcomes have improved, Blue Cross said.
In addition, Blue
Cross said the savings have led to at least nine premium reductions for small
group customers over the past five years along with slowing of rate increases
in the individual and Medicare Advantage markets.
Value-based care
contracts are designed to reward providers for reducing hospital readmissions
and unnecessary emergency department visits, eliminating duplicate and wasteful
services and moving care to lower-cost outpatient settings, when appropriate.
With Blueprint
for Affordability, Blue Cross is providing health systems and physician
organizations with additional data to give them the tools they need to manage
their patient populations more effectively.
In previous
interviews, healthcare executives told Crain's they need more data to manage
their patient populations, especially because patients don't always stay within
their systems of care.
Blue Cross
executives said the additional data and better patient care management will
help providers costly tests, imaging, ED visits and hospitalizations.
How Blueprint
works
The Blueprint
risk-based program includes Blue Cross' PPO commercial members and Blue Cross'
Medicare Advantage PPO members, which represent 30% of the covered population
in Southeast Michigan, or hundreds of thousands of members with more than $4
billion in total costs of care in the region.
Healthcare
providers can earn additional dollars in slightly different ways in the
commercial and Medicare Advantage markets. In the commercial space, if the four
hospital-based systems and three physician organizations hold down annual
expenses in the commercial business below the statewide average of 4%-5% in
2019, they share savings on a 50-50 basis with Blue Cross, company officials
said.
However, if costs
exceed the statewide average, the healthcare organizations must pay back Blue
Cross 50% of the excess amount, subject to loss caps.
Blueprint is
intended to be revenue- and budget-neutral for Blue Cross as incentive payments
to providers will equal refunded risk payments, although it may take a few
years to achieve the balance. Providers will continue to be paid for services
and procedures under Blue Cross' fee schedule. The risk-based program is in
addition to the existing payments.
For commercial
patients, Blue Cross has 14 designated quality measurement targets that health
care organizations must hit to receive shared savings. Medicare Advantage
patients have 14 slightly different quality measurements. The measurements
could change in the future based on Medicare or Blue Cross priorities.
Commercial
quality measurements are the following: appropriate testing for children with
pharyngitis; appropriate treatment for children with upper respiratory
infection; avoidance of antibiotic treatment in adults with acute bronchitis;
breast cancer screening; cervical cancer screening; childhood immunizations;
colorectal cancer screening; three diabetes-care metrics, including blood
glucose controls; controlling high blood pressure; statin therapy for patients
with cardiovascular disease; statin therapy for patients with diabetes; and use
of imaging studies for low back pain.
For Medicare
Advantage, quality measures include breast and colorectal screening, diabetes
control, osteoporosis management in women, all-cause readmissions, rheumatoid
arthritis management and statin therapy for cardiovascular disease. Four other
measures are medication adherence for cholesterol, diabetes, hypertension and
cardiovascular disease.
This article was originally
published in Crain's Detroit Business.
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