There is a need to bridge the gap between health plans and providers.

Most health plan’s viewpoint is that cost increases stem from physician productivity more than fee increases. Physician productivity increases create more “downstream” expenses. Pre-certification is not effective in controlling utilization.

Most physicians’ viewpoint is that maintaining or increasing physician income is all about productivity. Pre-certification is a nuisance. If the health plan is looking to reduce utilization, it must also be looking to cut physician income.

Reimbursement methodology matters. Reducing utilization is unlikely under fee-for-service because fewer procedures means less income for physicians. To reduce utilization and maintain overall physician funding, reimbursement must be “uncoupled” from procedures.

OGM’s blended payment methodology (BPS) effectively uncouples income from utilization. BPS combines the utilization changes of contact capitation with the incentives inherent in pay for performance. Our plan eliminates the need for pre-certification of surgical procedures and does not require information system changes.

The blended payment system pays providers a blend of contact cap and fee for service and is built around the framework of a pay for performance program. The utilization changes are consistent and predictable:

Plans have consistently saved $1 PMPM.

Our payment system can be applied to HMO, PPO, and ASO accounts.  It does not require information system changes.