Although Royal Oak, Mich.-based Beaumont Health System and Blue Cross Blue Shield of Michigan are currently in negotiations over hospital price increases, the standoff involves several other issues, such as value-based incentive contracts, according to a Crain's Detroit Business report.
Currently, Beaumont is proposing a 6 percent increase in 2012, 1.5 percent increase in 2013 and a 1.5 percent increase in 2014. Conversely, BCBS of Michigan is proposing an increase of less than 5 percent in 2012 and no increases in 2013 and 2014, according to the report.
Beaumont wants BCBS of Michigan to agree to higher price increases before it ties claims to financial incentives. BCBS of Michigan, however, wants to make the switch to a payment system that holds hospitals accountable through value-based incentive contracts and encourages hospitals to work more closely with physicians to reduce expensive treatments.
Although Beaumont and BCBS of Michigan both want to move toward the value-based incentive model, Beaumont has said it will need higher prices from the insurer to help pay for the electronic medical records and other quality systems in addition to more time for implementation, according to the report.
If neither side comes to an agreement by Dec. 31, Beaumont will terminate its contract with Blue Care Network, the HMO of BCBS of Michigan.
Currently, Beaumont is proposing a 6 percent increase in 2012, 1.5 percent increase in 2013 and a 1.5 percent increase in 2014. Conversely, BCBS of Michigan is proposing an increase of less than 5 percent in 2012 and no increases in 2013 and 2014, according to the report.
Beaumont wants BCBS of Michigan to agree to higher price increases before it ties claims to financial incentives. BCBS of Michigan, however, wants to make the switch to a payment system that holds hospitals accountable through value-based incentive contracts and encourages hospitals to work more closely with physicians to reduce expensive treatments.
Although Beaumont and BCBS of Michigan both want to move toward the value-based incentive model, Beaumont has said it will need higher prices from the insurer to help pay for the electronic medical records and other quality systems in addition to more time for implementation, according to the report.
If neither side comes to an agreement by Dec. 31, Beaumont will terminate its contract with Blue Care Network, the HMO of BCBS of Michigan.
Related Articles on Beaumont Health and BCBS:
BCBS of Michigan Defends Reimbursement Talks, Fires Back at Beaumont Health
Michigan's Beaumont Health Urges Patients to Call BCBS Regarding Payment Disparities
Beaumont Health System Plans to Stop Accepting Insurance From BCBS HMO