Blue Cross, South County ink contract

PROVIDENCE – The new contract between South County Hospital and Blue Cross & Blue Shield of Rhode Island includes global payment terms designed to improve quality and moderate costs, Blue Cross officials announced May 3.
This agreement also is consistent with payment reform terms that were set in July by R.I. Health Insurance Commissioner Christopher F. Koller. Those conditions include efficiency-based units of payment for services, an annual maximum payment increase for services based on Medicare’s calculation, quality incentives based on national standards and administrative efficiency standards.
Under the contract’s terms, South County Hospital will be provided with a single global payment for providing health care services to Blue Cross members, instead of a payment for every service provided. If South County Hospital is successful in its efforts to improve community wellness and member health outcomes, its profit will be greater. If not, its profit will be less.
“Hospital reimbursements rose 24.2 percent more than inflation from 2007 through 2010, making them the No. 1 driver of health care costs today,” said Dr. Gus Manocchia, vice president and chief medical officer at Blue Cross. “South County Hospital has moved away from the traditional fee-for-service compensation model, which incents volume, to an innovative global payment model, which encourages high quality care, efficiency and care coordination across the local system.”
“Changing the way the hospital is paid allows us to continue that work without compromising our financial well-being,” said Lou Giancola, president and CEO of South County Hospital. “While there are certainly many challenges ahead, we believe the goals of South County Hospital and Blue Cross are aligned.”
In order to track progress, the two parties will meet on a quarterly basis to discuss operational, financial and quality performance.