WellPoint reimbursement increases now tied to hospital quality indicators

In keeping with the trend to move hospital reimbursement from volume-oriented to quality-oriented, Indianapolis-based WellPoint (NYSE: WLP) will halt annual payment increases to about 1,500 hospitals if they fail to meet its treatment quality criteria.

Reimbursement increases for hospitals in 14 states that serve WellPoint's Blue Cross Blue Shield plans will be tied to a 51-indicator test, reports the Wall Street Journal. Health outcomes account for 55 percent of a hospital's score, patient safety determines 35 percent and patient satisfaction represents 10 percent.

For example, hospitals that try to prevent patients from relapsing after they leave the hospital, follow a safety checklist, or prohibit smoking in its facilities for patients, workers and visitors would score high on the treatment quality test, notes the Journal.

So far, WellPoint is the first major health insurer to require all hospitals serving its affiliated plans qualify for a payment increase, according to the Journal. About 500 of its hospitals already participate in a voluntary version of the new system, and get average pay increases of 7 to 9 percent each year.

WellPoint intends to use the new, mandatory system to save the health insurer and the overall healthcare industry money, WellPoint's Chief Medical Officer Samuel Nussbaum told the newspaper. He said the system could decelerate its inpatient care spending by three to five percentage points annually over time.

For more:
- read the Wall Street Journal article

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