Hospitals, health systems and group practices (“Providers”) have a new opportunity to create localized, exclusive provider networks by partnering with Blue Cross Blue Shield of Michigan (“BCBS”) for its new insurance products. With the looming implementation of the of Patient Protection and Affordable Care Act (“ACA”), BCBS believes that many individuals will be willing to trade broad network access for a quality local network and a lower-cost insurance premium.
As such, BCBS has developed new insurance products that will only cover treatment within an individual’s designed provider network. With the exception of emergency services, individuals will pay for out-of-network care.
Currently, BCBS seeks Provider partners for two insurance products. The first product involves an exclusive provider contract through BCBS that will cover Providers in Lenawee, Livingston, Macomb, Monroe, Oakland, Washtenaw, Wayne and St. Clair counties. The second product involves a contract through Blue Care Network that will cover Providers in Livingston, Macomb, Monroe, Oakland, Washtenaw, Wayne and St. Clair counties. Providers must respond to BCBS’s request for proposal by October 7, 2013. BCBS anticipates that both products will be available for enrollment through both conventional channels and the health insurance exchange starting in October 2014. Coverage under these plans will be effective in 2015.
The introduction of these products for Southeast Michigan follows a partnership forged between BCBS and Mercy Health on the west side of the state. In June 2013, BCBS partnered with Mercy Health to create an exclusive provider network for Kent, Muskegon and Oceana counties. BCBS plans to have this product available when the health insurance exchange/marketplace begins open enrollment on October 1, 2013.
BCBS’s exclusive provider network contracts play an important role in the restructuring of Provider payments and the evolution of integrated health care. Under the ACA, Providers are tasked with improving patient outcomes while reducing the costs of expenditures. By keeping patient care localized within a network, BCBS hopes to reduce costs by eliminating unnecessary treatments and tests and improve the quality of care by encouraging Providers within the network to work together. To accomplish these goals, BCBS has included a number of requirements for the two pending Provider contracts, including:
- BCBS is allowed to audit a Provider’s utilization, quality and health management programs;
- The Provider will not request or accept payment for services denied by BCBS;
- The Provider agrees to include all employed doctors in the exclusive provider network;
- The Provider agrees to coordinate benefits;
- The Provider must agree to allow referrals to other Providers in BCBS’s network when a services is not available through the Provider; and
- The Provider must demonstrate sound financial stability for the last five years.