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Blue Cross to Expand Value-Based Care Reimbursement in 2017

Blue Cross Blue Shield of Michigan is moving forward with advancing value-based care reimbursement models and patient-centered medical homes in 2017.

By Vera Gruessner

The coming years will further position the medical industry including payers to adopt value-based care reimbursement models and new healthcare delivery systems partially due to the reforms that came about from the Patient Protection and Affordable Care Act.

Affordable Care Act

Additionally, the continual rise in medical costs has been pushing the health insurance industry to transition from fee-for-service payment systems that incentivize doctors to provide more therapies and medical tests.

As such, value-based care reimbursement has become more popular in the public and private sectors. However, how has value-based care reimbursement influenced payers in the past year and how are they positioned to tackle new payment structures in 2017? spoke with David A. Share, M.D., the Senior Vice President for Value Partnerships at Blue Cross Blue Shield of Michigan, about how value-based care has impacted BCBS of Michigan over the last year and where they are moving their payment structures next year.

“The area that I lead is called Value Partnership,” Share Said. “We’ve known from the start that having health plans simply tell people what to do doesn’t engage them very much. If we just told the provider community what they need to do, they’d do what they had to but they wouldn’t do the very most. By partnering with them in 2004 to envision a more effective health system and then to transform reimbursement to a value-based approach to support that, that created a lot of trust and a lot of engagement.”

READ MORE: Why Value-Based Care Reimbursement Needs Risk Adjustment

“In the last year, we’ve grown in our understanding that the same principle applies to the members or consumers. Finding ways to connect with them as full partners rather than passive recipients of insurance is very important,” Share noted.

Share further discussed the necessity of consumer engagement and how user-friendly tools and new healthcare delivery models like the patient-centered medical home could boost the satisfaction and engagement among a health plan’s membership.

“There’s two avenues. One is direct to consumer engagement, which creating tools to make insurance clearer and simpler and enable them to make choices about how to use benefits along with which organized systems in primary care and patient-centered medical home practices to use,” continued Share.

Health plans can assist consumers in using resources wisely, explained Share. Payers can more actively invest in new patient-centered tools as well as ensure patients are engaged with their primary care physicians.

“Those kind of tools are really important so we’re investing more in those,” Share added. “The second way of engaging consumers more actively as partners is through the patient-centered medical home practices and the relationships with their doctors. The more information physicians to help them understand patient needs and tools to communicate effectively and timely with those patients should help the patient become an active consumer. That’s going to make the doctor more effective in meeting patient needs and will engage the patient more as a partner. We’ve learned that partnership matters.”

READ MORE: Health Insurance Exchanges Require Engagement, Narrow Networks

Dr. Share also expressed how health payers have been facing challenges in helping consumers navigate the public health insurance marketplace created under the Affordable Care Act.

“In very general terms, there is a steep learning curve to ramp up fast and on a scale of hundreds of people who are available to help consumers navigate the products. That was maybe the very biggest challenge of having a staff that is knowledgeable and could help consumer navigate the website and the alternatives on a very timely basis,” Share said. “That was one of the things we did very assertively and we supported tens of thousands of people in a short period of time. That was a big challenge. Having products that were priced fairly and competitively under conditions of uncertainty was also complicated.”

The reason why determining the right price for health plans is an obstacle for health payers today is due to an uncertainty over what their risk pool would be and what type of consumers health-wise would sign up. Also, with a ramp up of competition, Blue Cross Blue Shield of Michigan was unaware on what prices their competitors were putting out ahead of time, which posed a challenge.

“By the time you committed to a product portfolio and pricing, others have also and then it becomes known. In a marketplace where that information comes after the fact, it’s a bit harder to know how to price things in a way that will be sustainable in the long run and fair or reasonable,” Share explained.

Dr. Share also discussed some of the plans Blue Cross Blue Shield of Michigan has for expanding value-based care reimbursement strategies in 2017.

READ MORE: Why GOP Should Hold Off on Replacing the Affordable Care Act

“We just launched this personal choice value-based product in October. We will be working hard with organized systems to evolve our approach in measuring value so that in the future duration of the product, value will be defined more broadly,” Share added. “Also, we’re working to develop methods not just to tier the organized systems on a value scale and vary the number liability but also to attract more members. We also want to develop the method to build risk into the contract so that organized systems do well on achieving cost goals and quality improvement goals.”

Next year’s goals for Blue Cross Blue Shield of Michigan will also include continued expansion of their patient-centered medical home model.

“If they do worse and don’t meet our expectations of the health plan, then they would be at risk for that especially on the cost side. We’re developing methods to allow us to strengthen the product in that way,” he concluded. “We are continuously working with physician organizations to support the building of more medical home capabilities and working for more of the PCP practices to help them become eligible to be PCMH designated. We now have very close to 80 percent of the PCP practices that are in the physician organizations achieving that designation status.”


Dig Deeper:

How Payers Should Prepare for Value-Based Reimbursement

The Progress and Challenges of the Affordable Care Act


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