Blue Cross Blue Shield of Michigan and Munson Healthcare Embrace New Approach to Reimbursement

Nov. 12, 2013 – TRAVERSE CITY, Mich. — Munson Healthcare and Blue Cross Blue Shield of Michigan say they are launching a new value-based hospital reimbursement agreement in northern Michigan designed to improve patient care and medical outcomes while also enhancing efficiency and holding down the cost of care.

According to a press release posted on, their agreement provides a fair base-rate increase in reimbursement from BCBSM to the hospital. In addition Blue Cross will reward the hospitals with a share of the savings achieved when hospitals and physicians coordinate the delivery of efficient and effective care, eliminate reuse and overuse of care, and prevent re-hospitalizations.

The arrangement covers a three-year period and supports closer collaboration between the hospitals and their physician partners to improve the health of the populations they serve. To accomplish this, BCBSM will provide the health system with funding for infrastructure improvements needed to better coordinate care between the hospitals and physicians. Each hospital and its physicians have established milestones to ensure infrastructure work continues along with funding through 2015.

The release notes that, on the federal level, evolving from the traditional fee-for-service payment approach toward more emphasis on value-based hospital contracting has already shown success. See more at

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