Blue Cross and Blue Shield of North Carolina, the state’s dominant health insurer with more than 3.8 million members, has launched a new program to help independent doctors’ practices weather financial impacts of the coronavirus pandemic and switch to offering value-based care.
Across the state, doctors’ offices and hospitals have had to limit hours, availability and reduced highly-lucrative revenue streams, such as elective surgeries, in the wake of COVID-19. “Many providers, particularly primary care providers, have seen dramatic drops in revenue, sometimes as much as 50%,” says Rahul Rajkumar, chief medical officer and senior vice president for Blue Cross NC.
Blue Cross’s new Accelerate to Value program will help bridge financial shortfalls by offering lump-sum payments to participating practices.
“We’ll look at their 2019 revenue, where they are in 2020 and project what we think 2020 will look like for the rest of the year. Then in lump sum we’ll pay the difference. And we’ll do the same thing in 2021.” Rajkumar says. “The idea is to true them up to their 2019 revenue level. What we are asking is these practices stay open and independent.”
Blue Cross will update its projections as the pandemic continues. If Blue Cross underestimates the shortfall, it will give more funds to the providers, Rajkumar says. And the insurer won’t claw back any overpayments, if practices receive a little more than what they need, he says.
The contingency is physicians that sign on will be required to join Blue Premier or another value-based care program by 2021. Under the Blue Premier program, Blue Cross calculates a baseline cost for a provider’s patient population and projects that into the future. If the providers beat that projection, they share in the savings with Blue Cross. If they exceed that projection, they share in the losses, according to Rajkumar. The goal is to increase patient outcomes through accountability.
Beginning in 2022, Accelerate to Value will replace a fee-for-service method of payment with a capitation model. Through capitation, providers receive fixed monthly payments for meeting health needs of their patient populations, rather than getting paid per patient encounter. “That gives more flexibility to design care and deliver care in the most efficient way and best way for their members,” Rajkumar says.
Many of the state’s big hospitals have agreed to contracts with Blue Cross that promote such value-based care. The insurer has gained national attention for its aggressive efforts to promote the initiative.
Blue Cross notified more than 1,000 independent practices about Accelerate to Value when the program launched. Rajkumar thinks there is strong interest. Within five minutes of the initial announcement, applications started pouring into the portal, he says.
Accelerate to Value has been endorsed by the N.C. Academy of Family Physicians, the state’s largest specialty medicine association with more than 4,200 family physicians in its membership, according to a Blue Cross spokesperson. The NCAFP was unavailable for an immediate comment.
“We rely on the providers in our state to care for our members and communities… During this pandemic many are providing care heroically and often at personal risk to themselves,” Rajkumar says. “We have a duty and desire to act.”