Provider Orgs Join Full-Risk Value-Based Care Contracts with BCBSM

January 10, 2023 - Blue Cross Blue Shield of Michigan (BCBSM) is helping advance the shift to value-based care by initiating full-risk reimbursement arrangements with six provider organizations.

The agreements are for the payer’s Medicare Advantage preferred provider organization (PPO) and Blue Care Network Medicare Advantage plans. Following these new contracts, around 30 percent of BCBSM’s Medicare Advantage members will receive services from physicians participating in full-risk reimbursement arrangements.

Full-risk contracts tie reimbursement to physician performance and patient health outcomes rather than service volumes. Provider organizations are financially accountable for patients’ care quality, experiences, and total cost of care. At the same time, they must meet certain quality and cost goals.

Provider organizations receive higher reimbursement when they meet their goals and are financially responsible for added costs when they do not.

Six organizations have agreed to full-risk contracts with BCBSM, including Huron Valley Practice Affiliates, Medical Network One, Oakland Physician Network Services, and United Physicians in Southeast Michigan, Great Lakes Physician Organization in Central Michigan, and Answer Health in West Michigan.

“These newest agreements are robust and demonstrate our collective leadership in advancing value-based payment models that improve quality and safety, avoid redundancy, and contribute to an improved patient experience,” Daniel J. Loepp, president and chief executive of BCBSM, said in the press release. “Physician organizations are willing to enter these arrangements because they know it will enable us to achieve our mutual goal of better, more affordable healthcare.”

The organizations are working with enablement partners that help providers navigate the new payment arrangements and ensure timely and coordinated care delivery.

BCBSM launched its “Blueprint for Affordability” alternative payment model in December 2019, with seven provider organizations entering risk-sharing arrangements.

Since then, 22 provider organizations and health systems have joined the payment model, representing more than 50 percent of in-state BCBSM members.

Results from 2020 and 2021 revealed that participating providers achieved better quality and cost outcomes compared to other providers. For example, healthcare spending was $70 million lower for organizations in the value-based payment model. In addition, organizations saw higher breast cancer and colorectal screening rates and better performance with childhood immunizations and diabetic control measures.

“We owe it to our members and customers to think and work differently; to address the key drivers of healthcare costs and collaborate on solutions that promote more successful outcomes and more affordable health insurance costs,” said Todd Van Tol, executive vice president of Health Care Value at BCBSM. “Blueprint for Affordability is our approach to sharing financial risk, improving the patient experience, and keeping costs more manageable.”

Even before BCBSM launched the Blueprint for Affordability, the payer was working to accelerate the shift to value-based care in Michigan. The payer’s Patient-Centered Medical Home model helped reduce expected healthcare spending by $626 million between 2009 and 2017. The model also increased rates of preventive and coordinated care, helping patients avoid emergency room visits and hospitalization.

According to industry experts, the rising cost of chronic disease care will likely motivate payers to increase their value-based care efforts.

However, proper value-based care must consist of an upside and downside risk-sharing agreement between payers and providers, Sean Robbins, executive vice president of external affairs for Blue Cross Blue Shield Association, told HealthPayerIntelligence.