Laboratory News

Massachusetts Blue Cross Blue Shield Tries Flat Fee Reimbursement Plan for Providers

Different reimbursement models for physicians are emerging as the healthcare system attempts to encourage early detection and preventative care.  Blue Cross and Blue Shield of Massachusetts  (BCBSM), the state's largest insurer, is offering its participating providers the option of switching out of a traditional fee-for-service model.  Now, providers can opt to be paid a flat fee per patient per year model. The specific amount for each patient will be adjusted for age and illness. Providers will also be eligible for performance bonuses of up to 10% for quality improvement.

BCBSM believes this different reimbursement model can deliver higher outcomes. As it does, it should reduce the year-by-year increase in the cost of care.  Chris Murphy, spokesman for Blue Cross Blue Shield of Massachusetts, said that the insurer doesn't expect to cut costs, but to slow healthcare spending through efficiencies.  The company estimates that spending would grow at 4% to 6% per year if providers enrolled in the new model, as opposed to 10% to 12% annually today.  "Better outcomes have demonstrated that they lead to savings," Murphy said.  "We think we'll see more innovative and creative care on the provider level."

The new payment model will be rolled out through Blue Cross Blue Shield of Massachusetts' HMO.  The model will be offered through five-year contracts.  BCBSM expects that providers will begin to sign on for the new reimbursement program in the next few months.

Some parties are concerned that this new payment model represents a return to capitation-where a fixed prepayment, per each patient covered, is made to a healthcare provider. Murphy responds that this is not the case, since the per-patient reimbursement will be risk-adjusted, and because incentive rewards are built into the model. 

Blue Cross Blue Shield of Massachusetts has not yet released the specific amounts it will pay for each patient.  It is not likely that providers will accept this new reimbursement arrangement until they have access to that information. 

Laboratory directors and pathologists can expect to see more attempts by regional payers to reimburse physicians and hospital in different ways than either traditional fee-for-service or straight capitation.  In order to encourage providers to improve patient outcomes, new schemes for reimbursement will be introduced.  However, providers have reason to be skeptical about new approaches to provider reimbursement. Too often in the past 20 years, a different reimbursement scheme has simply meant less money to the provider for the same service.  Thus, the health insurance industry must offer credible reimbursement programs that effectively reward a provider by paying higher reimbursement for higher outcomes.  Any other consequence to these new reimbursement plans will cause physicians to reject them en masse.

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