Munson Healthcare Signs Value-Based Reimbursement Deal With Blue Cross

Munson Healthcare, an eight-hospital system based in Traverse City, Mich., has signed a value-based reimbursement agreement with Blue Cross Blue Shield of Michigan.

The contract spans three years and will be piloted at three of Munson's hospitals: 391-bed Munson Medical Center in Traverse City and two critical access hospitals, eight-bed Paul Oliver Memorial Hospital in Frankfort, Mich., and eight-bed Kalkaska (Mich.) Memorial Health Center. Blue Cross will provide Munson with an unspecified amount of funding to improve infrastructure and coordination between the hospitals and physicians.

Munson hospitals will receive a set increase in base rates, and Blue Cross will reward the hospitals with shared savings if care is delivered efficiently and effectively.

Munson President and CEO Ed Ness said in a news release the deal represents the shifting paradigm of healthcare, as it moves from fee-for-service to value-based reimbursement, calling the new contract "the right thing to do." Munson CFO Mark Hepler said the contract will reward Munson's providers for "high quality care at a low cost," something he said they already do.

Blue Cross inked a separate value-based reimbursement agreement with Livonia, Mich.-based CHE Trinity Health's 12 Michigan hospitals in April.

More Articles on Health Systems and Value-Based Contracts:
5 Best Practices for a Successful Transition to Value-Based Payments
Navigating the Journey: How Hospitals Can Transition From Providing Care to Managing Health
At the Forefront: How Hospitals and Health Systems Can Be on the Cutting Edge With Payers

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