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Insurer's Reimbursement Model Rewards Lower Costs

Rene Letourneau, for HealthLeaders Media, July 8, 2013

"We provide a broader view of the information on their patients so the nurses can make those calls to get patients to come in and get care," Salmon says.

Providers that succeed in reining in costs while sustaining quality reap additional financial benefits after the first year in the CAC program.

"The real benefit is at the end of each year, we look to see if total medical costs have been lowered and quality has been improved or maintained. If quality has gone down, there is no financial reward. If they pass that threshold and if total medical costs have come down, the fee is increased in the second year by about half of what the group achieved in decreasing the medical cost," Salmon explains.

For example, if the practice decreases the total cost of medical care per person by $4 compared to market trends, the fee would jump from $1.50 to $3.50 per person in the second year.

As part of the CAC program, Cigna also provides a quarterly performance report to each participating hospital and physician group that measures total medical costs and drivers such as emergency department admissions, hospitalization rates, readmission rates, and use of high-tech imaging devices, so that the practices can track their performance and improvement.

"One typical example of how groups use this report is if the report shows a high ER visit rate among patients, the group expands office hours and makes it easier for patients to make an appointment, which can improve measures," Salmon says.  

"As a payer, we can modify the incentives, but we also have an important role to play in helping healthcare professionals to be successful… by providing useful information to help them provide more comprehensive care to their patients."

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