Cal. Blue Cross Pay Policy Irks Hospitals
Posted on: Thursday, 5 October 2006, 18:00 CDT
A new pay-for-performance policy implemented by Blue Cross of California has a hospital group up in arms, reports said Thursday.
Blue Cross of California, as part of its new system of financial rewards and penalities within its preferred provider organization (PPO) network, said it would start paying doctors a 20 percent reimbursement bonus to perform colonoscopies and other elective endoscopies in ambulatory surgical centers (ASCs), rather than in hospitals, according to a report by healthcare intelligence firm HealthLeaders-InterStudy.
The insurance giant is also cutting physician reimbursement by 5 percent if those same procedures are done in a hospital setting, which carries a bigger price tag.
According to Blue Cross, clinical data of colonoscopies performed on its members shows no discernable difference in quality based on the medical setting, said Chris Lewis, HealthLeaders-InterStudy research analyst. With a significant cost difference between ASCs and the hospital setting, Blue Cross is hoping to control costs both for the plan and its members.
But Blue Cross's new policy has irked the California Hospital Association (CHA), which argues that the reimbursement practice violates the state's Insurance Code and Knox Keene Act, laws which the hospital group says make it illegal to provide financial incentives to reduce, deny or limit services, the HealthLeaders InterStudy report said.
CHA has already tried unsuccessfully to legally enjoin Blue Cross from putting the new policy into effect. A California court has stayed legal procedures in the case until the California Department of Managed Health Care advises the court of its position on the matter.
Source: United Press International
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