IBC and Penn Medicine agree to three-year contract extension that builds on innovations
The contract extension allows Independence Blue Cross and the University of Pennsylvania Health System to continue collaborating on experiments in the way care is delivered and paid for.
Patients with breast cancer at Penn Medicine won’t need precertification for radiation therapy if they have Independence Blue Cross insurance. They can start right away, under a pact that was extended Monday between the region’s largest insurer and its biggest health system.
The arrangement “improves access, it improves coordination for Penn and the patient. It improves the overall experience. No waiting,” Richard Snyder, IBC’s chief medical officer, said Monday, describing a highlight of the agreement, which was extended for three years.
The contract extension builds on a groundbreaking 2017 deal that contained a guarantee that neither IBC nor the IBC member would be charged for a hospital readmission within 30 days of an inpatient stay or surgery. Avoidable readmissions are seen as a failure in care. And in the first year of that deal, hospital readmissions fell by 25%, according to Penn and IBC.
The goal of such arrangements is to make hospitals and doctors more accountable for their quality of care. They are part of a slow movement in health care to hold down ever-rising costs by moving away from the traditional model of paying for separate services, no matter what the results, and to paying for good outcomes, including patient satisfaction and medical results.
“It’s more than just cost,” Snyder said. Contracts such as the one with Penn are “predicated on the need to improve for our members access to care, coordination of care, the experience of care, quality, and cost,” he said.
Eliminating the precertification process for cancer patients who need radiation therapy helps on all of those fronts, Snyder said: “The patient has a better experience because they can get started on day one when they find out that they need radiation therapy.”
In exchange for not going through the hassle of obtaining precertification from IBC, Penn takes one set payment for a course of treatment, no matter how much the treatment ends up costing. IBC pays half the money at the beginning and half at the end. That saves Penn the administrative costs of billing for every visit and processing copays.
Penn is the only health system to have this arrangement with IBC, executives said.
Traditional Medicare is putting 15 of Penn’s radiation therapy locations into a similar payment program on Jan. 1, said Kevin B. Mahoney, chief executive of Penn’s health system.
“It has been incredibly valuable to us and to the Blue Cross members that we worked on this ahead of time,” he said, describing Penn’s readiness for the Medicare rollout.
Another program that Penn would like to expand under the contract extension, which will take effect July 1, 2022, enhanced the screening of ER patients to determine which of them can be adequately cared for at home rather than in the hospital. Many times, Snyder said, emergency physicians admit patients to the hospital because they are not sure whether patients have a safe environment at home.
With IBC’s financial support, Penn tested the idea for two weeks in December 2019 and found that 90% of the patients cared for at home recovered there, treated partly through telemedicine, and did not have to return to the emergency department.
Still to be answered is how much doctors and hospitals should be paid for hospital care at home and with telemedicine. Snyder said IBC and Penn are well on their way to figuring that out.
“One of the hopes for care at home and telehealth is that care in those settings should arguably cost less than in a traditional care setting,” Craig Samitt, former president and CEO of Blue Cross and Blue Shield of Minnesota, said on Nov. 12 during an online seminar organized by Penn’s Leonard Davis Institute, a forum for health-care policy research.
“A shift in venue should ideally not just be convenient for the patient, and more equitable, hopefully, but would also cost less,” Samitt said.
Unlike Jefferson, which recently acquired Health Partners Plans. Inc, a nonprofit Medicaid and Medicare insurer, Penn has no interest in going into the insurance business itself, preferring to take on risk in a controlled area, such as radiation therapy or joint replacement, Mahoney said.
Mahoney thinks it would be difficult and distracting to switch back and forth between the insurer and provider mindset. “That cognitive dissonance, I don’t think that’s a healthy thing,” he said.