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Beaumont Health System, Blue Cross Blue Shield of Michigan and Blue Care Network
Reach Agreement on Reimbursement Contract

Blue Cross Blue Shield of Michigan, Blue Care Network and Beaumont Health System signed a new contract late Thursday that keeps Beaumont Health System in the hospital network used by Blue Care Network hospital network, increases reimbursement to the health system and institutes new performance-based standards for paying the health system in the future.

Daniel J. Loepp, Blues president and CEO said,

“This agreement is a win-win – not for the health system or the insurer – but for our members and customers. It maintains access to Beaumont facilities for our customers and members. It commits Beaumont, Blue Cross and physicians to work together to achieve high-quality health care and the efficient use of health care dollars. It advances our efforts to deliver innovation in how Michigan pays for health care in the future.”

The five-year agreement provides an increase in base reimbursement to Beaumont Health System while also committing Beaumont to a new performance-based hospital payment model sought by the Blues. Under the new model, Beaumont will work closely with its affiliated physician organizations and the Blues to design standards for successful patient health outcomes that will be the basis for part of its reimbursement.

The new contract moves away from the traditional fee-for-service payment approach toward an outcomes-based approach that revolutionizes the ways hospitals are paid. The new pay-for-performance contract terms sought by the Blues and achieved in this agreement represent a new standard for how Michigan hospitals are paid for services, and how the Blues can help hospitals and physician organizations build efficient and coordinated systems of care.

The agreement includes an opportunity for infrastructure improvements needed to better integrate care services between Beaumont and its physicians groups. The performance standards that will be mutually determined by Beaumont and the Blues will financially reward the hospital for maintaining better overall population health and ensuring the efficient use of tests and procedures.

In December the Blues announced that St. John Providence Health System (SJPHS), and its five acute care hospitals across southeast Michigan, was the first health system in the state to partner with the Blues on a new performance-based reimbursement model. Both the new Beaumont contract and the agreement with the St. John Providence System signal a new era in health care that rewards hospitals for keeping patients healthy and out of the hospital.

We extend thanks to our agents, groups and members for their patience during the contract negotiations. We recognize that some may have felt caught in the middle and may have been inconvenienced. We apologize for the uncertainty the situation has caused. We value the relationships we have with our customers and agents.

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