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Commercial Health Insurers Must Direct 40% Of Payments Through "Alternative" Models

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Rhode Island’s health insurance commissioner is requiring insurance companies to put more money into so-called alternative models for paying doctors. Th...

Rhode Island’s health insurance commissioner is requiring insurance companies to put more money into so-called alternative models for paying doctors. That means directing more payments toward quality instead of the number of visits to the doctor’s office.

What’s an alternative payment model? Here’s an example: bundled payments. Say you need a hip replacement. Instead of paying for the surgery and the anesthesia and the post-operative therapy, all of that gets bundled together into one price. Now insurers have to seek out these kind of models – and make them 40 percent of their total claims by 2017.

But will it save Rhode Islanders money in the long run? Health insurance commissioner Dr. Kathleen Hittner says it’s hard to predict, but with a new statewide health care database,“We’ll be able to trace it and know if we’re being successful or not," says Hittner.

Hittner has also issued a new ruling for primary care practices. They must do more to bring down costs. 

The rulings are part of an ongoing effort in the state to move away from fee-for-service payments and toward pay for performance and quality. The efforts are still so new that it's difficult to tell how well they're working. Some primary care practices that have adopted new payment models and a new care model called a Patient-Centered Medical Home have reported better patient outcomes on certain measures and some savings on emergency room visits.

Read The Office of the Health Insurance Commissioner's Alternative Payment Methodology plan.

Read OHIC's Primary Care Transformation Plan.

This emergency room bed is empty; patient-centered medical homes hope to keep them that way by managing patients' chronic illnesses and preventing symptoms from getting worse.
This emergency room bed is empty; patient-centered medical homes hope to keep them that way by managing patients' chronic illnesses and preventing symptoms from getting worse.