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Analysis

BCBS Michigan, Seven Providers Announce Shared Risk Contract Agreement

By Jack O'Brien  
   December 11, 2019

The new shared-risk payment model, named Blueprint for Affordability, will take effect on January 1, 2020.

Blue Cross Blue Shield of Michigan (BCBSM) announced the establishment of shared financial risk contracts with seven Michigan provider organizations Wednesday afternoon. 

The new shared-risk payment model, named Blueprint for Affordability, will introduce downside financial risk to contracts with provider organizations and take effect on January 1, 2020, according to BCBS. 

The seven providers participating in BCBSM's new payment model include Ascension Health, Henry Ford Health System, Michigan Medicine, Oakland Southfield Physicians, The Physician Alliance, Trinity Health, and United Physicians.

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Participating providers will abide by annual targets for total cost of providing care to BCBSM members, based upon an organization's total cost of care data and the statewide total cost of care average from the prior year.

Provider organizations that achieve aggregate costs within the financial target with sufficient quality metrics will receive an additional payment, while those that fail to meet either goal will pay a portion of the amount spent beyond the target.

Both BCBSM and representatives from the seven provider organizations stated that the agreement marks another development in the shift from a predominantly fee-for-service healthcare market towards a value-based care environment.

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"In these Blueprint contracts, providers are putting a portion of their payments at risk by sharing financial accountability for patient care and outcomes. This is truly a new approach in Michigan," Stephen Carrier, senior vice president of network management and provider partner innovation, BCBS of Michigan, said in a press call Wednesday.

"As we continue to increase our shared risk or get into full risk-based contracts, we see Blueprint for Affordability as a natural step in our strategy to improve care while managing costs for our patients," Harpreet Cheema, vice president of product development at Trinity Health, said during the press call.

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The agreement will cover 30% of its commercial and Medicare Advantage preferred provider organization populations, totaling $4 billion of healthcare spending. 

The Blueprint contracts cover the southeastern Michigan market due to high membership density but BCBSM plans to expand its payment arrangements to all provider organizations in the coming years. 

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Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: June 23, 2019. Blue Cross Blue Shield of Michigan (BCBSM) Sign in Downtown Detroit, Michigan, USA. / Editorial credit: alisafarov / Shutterstock.com


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