PROVIDENCE – Blue Cross & Blue Shield of Rhode Island is raising its payments to primary care providers in the state by about $40 million through 2028. However, some say the overall effect is at least a short-term drop in payments to primary care providers.
The payment increases will begin July 1, when there will be a 15% raise for traditional fee-for-service reimbursements to providers for each service offered to members in commercial fully insured plans. There will be more annual rate increases through 2028.
These payment hikes meet the R.I. Office of the Health Insurance Commissioner’s new affordability standards that went into effect on March 20. The new standard calls on insurers to raise funding for primary care and lessen administrative burdens stemming from prior authorization requirements.
Specifically, under the affordability standards, insurers must increase primary care spending so that 10% of their total annual medical expenditures for all lines of business are primary care payments by the end of 2028. Also, insurers must reduce the volume of prior authorization requests by 20% by the end of 2026. The 20% reduction is relative to a baseline established in 2023.
The insurer is reducing medical prior authorization requirements for primary care providers by 65% starting May 15. This reduction applies to primary care physicians in both commercial and Medicare plans.
Prior authorization is approval from insurers needed before a service or treatment can be covered by a patient’s plan. Prior authorization is meant to ensure patients receive safe and appropriate care. However, providers have said prior authorization can cause delays for patients and increase their administrative workload.
To find places to eliminate prior authorization requirements, the insurer used analytics to find the most common orders primary care providers are required to get approval for and how often those requests are approved, said Blue Cross spokesperson Rich Salit. Data showed that many of the orders were for radiology and cardiology services.
A new contract option will also be available in May that offers primary care providers with advanced monthly payments. This option is for a capitation model, in which providers will receive a fixed monthly payment from the insurer for each member they care for regardless of the number of office visits or services provided, Salit said.
To help those affected by the upcoming closure of Anchor Medical Associates, the insurer has been working with primary care providers in the network that have capacity to accept new patients. The insurer has also contacted members affected by the closure with options for primary care placement assistance.
“Primary care is critical to the health of Rhode Islanders of all ages. With its focus on disease prevention, management of chronic conditions and care coordination, primary care is foundational to our state’s health care system,” said Martha L. Wofford, CEO and president of Blue Cross. “We recognize that it is a challenging time for health care, and we’re hopeful that these efforts will help increase stability for PCPs and preserve Rhode Islanders’ access to care.”
The reduction of prior authorization requirements is a “modest” help but definitely a step in the right direction, said Dr. Peter Hollmann, a member of the Rhode Island Medical Society who is also chief medical officer of Brown Medicine.
However, the insurer is also considering taking away other funding, which could result in practices seeing an overall drop in funds from Blue Cross.
“It's a bit disturbing to see a press announcement as if we are helping primary care when, in fact, they are actually cutting payments to primary care practices in the wake of Anchor [Medical] going under,” Hollmann said.
Only about 40% of patients at Hollmann’s practice with Blue Cross qualify for the increase. Also, for months, the insurer has been talking about cutting infrastructure payments that are required under OHIC regulations to Brown Medicine, Hollmann said. The practice also gets infrastructure payments from other payers.
The payments have helped practices hire workers, such as nurses and pharmacists, getting electronic record systems set up and earning accreditation from the National Committee for Quality Assurance.
While the new infrastructure payment rates are being decided, Hollmann says his practice hasn’t received payment from the insurer since the end of 2024, but it has gotten payments from other insurers. He estimated the group would have received about $300,000 from Blue Cross during that time and it has been closing the funding gap itself.
If the insurer does end up cutting infrastructure payments to the program in half, Hollmann said the practice could lose more than $1 million from January 2025 to June 2027.
“Primary care is fragile today – we cannot tolerate a cut,” Hollmann said, noting that some of these primary programs are why people stay in the profession because they can help boost morale.
“It is in no way Blue Cross’ intent to lower primary care reimbursement,” Wofford said in an emailed statement to Providence Business News. “We are pleased to be increasing rates and are in the midst of conversations with practices to finalize 2025 contracts.”
(CORRECTS the spelling of Peter Hollmann throughout the story.)
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
