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Insurer, MI hospitals switch reimbursement plan

SFGate.com / Associated Press, April 30, 2013

LANSING, Mich. (AP) — Michigan's largest health insurer and a dozen hospitals announced Monday they are starting to carry out a cost-saving deal designed to prevent unnecessary or overused tests and procedures, an attempt to put less emphasis on the traditional way providers are reimbursed for medical services. Blue Cross Blue Shield of Michigan and Trinity Health-Michigan — one of the country's largest Catholic health care systems, which includes 12 hospitals around the state — said the dominant fee-for-service model is not working. They do not plan to drop the traditional model by which providers are reimbursed for each service through agreements with insurers. But hospitals will be rewarded financially for saving money by better coordinating care, preventing re-hospitalizations and improving patients' outcomes.