BCBS of Minnesota tries incentive-based payment model

Blue Cross Blue Shield of Minnesota is trying a new payment model designed to give doctors and hospitals financial rewards for providing better care at a lower price. It has signed "shared incentive" payment agreements with four large hospitals and clinics systems in the state.

Basic rates will stay in place for the four providers, but in the future, they will rely less on guaranteed rate increases and more on incentive payments that reward them for improving affordability, quality and efficiency of care delivery, according to the Minneapolis St. Paul Business Journal. The program will provide financial incentives to hospitals, physicians and clinics for meeting certain efficiency and quality measurements, Becker's Hospital Review reports.

"Traditional payment models have fallen short of addressing cost increases and have only minimally addressed quality goals," Patrick Geraghty, Blue Cross' president and CEO, said in a press release. "We see the pressing need in healthcare to get costs under control and improve quality, and we think both of those things can be accomplished with these types of arrangements," he told the St. Paul Pioneer Press.

Although the agreement sounds similar to an accountable care agreement, the groups stopped short of giving it the "ACO" label, notes Becker's.

To learn more:
- see the Becker's Hospital Review story
- read the Minneapolis St. Paul Business Journal piece
- read the St. Paul Pioneer Press article
- see the Blue Cross Blue Shield press release