8.27- Contracts update by ajizai


									                                          101 N. Main Street • Suite 430 • Ann Arbor, MI 48104
                                                 P: (517) 336-1400 • F: (517) 336-4177


DAT E:          August 27, 2009

RE:             BPO Contracts Update – BCN, Cofinity, Priority Health

Dear Beaumont Physicians:

We are pleased to announce that the Beaumont Physician Organization (BPO) has reached agreements with Blue Care Network
(BCN), Cofinity (Aetna/PPOM) and Priority Health.

Blue Care Network:
BPO and BCN have negotiated a risk sharing model agreement with 50/50 downside and upside sharing. The 16 month
contract, set to begin September 1, 2009, includes a fee-for-service reimbursement at a fee schedule at about 111 percent of
Medicare. Initial withholds include three percent for primary care physicians (PCP) and ten percent for specialists. This is
identical to the current arrangement most physicians at Beaumont have. The BPO contract does however include a larger
upside of up to $7.00 per member per month (pmpm), resulting in a better opportunity to share in surplus. While, the
contract is set to begin September 1, 2009, some physicians will begin participation October 1, 2009. Should a physician want to
begin participation in BCN through BPO on January 1, 2010, they should notify BPO immediately so that we can make those

Cofinity (Aetna/PPOM):
Cofinity and BPO have agreed upon an automatically renewing one year contract beginning on September 1, 2009, with a
fee-for-service reimbursement at 105 percent of Medicare. The two sides have also agreed to develop additional pay-for-
performance incentives. Also, the one percent tax between Cofinity and other physician organizations (PO) has been
eliminated in the BPO contract, thus resulting in additional financial returns to all participating physicians.

Priority Health (Health Maintenance Organization, Preferred Provider Organization and Medicare Advantage):
BPO has also reached an agreement with Priority Health’s Health Maintenance Organization (HMO), Preferred Provider
Organization and Medicare Advantage programs for a 16 month contract beginning September 1, 2009, with no withholds or
risk. The HMO contract includes fee–for-service reimbursement at about 108 percent of Medicare. Pay-for-performance
incentives will be awarded for meeting Healthcare Effectiveness Data and Information. Additional payments between $1.00
pmpm to $3.00 pmpm for PCPs who meet National Committee for Quality Assurance designation for Patient-Centered Medical
Home will also be available. Unlike Priority Health contracts with other POs, there will not be a five percent withhold with
this agreement.

BPO is also engaged in negotiations with other health plans, and contract status and progress will be disclosed in the near

Lastly, BPO has begun its process to participate in Blue Cross Blue Shield of Michigan’s (BCBSM) Physician Group Incentive
Program (PGIP). This participation will be effective January 1, 2010. Please look forward to more information regarding PGIP in
the coming days.

Please remember to register at www.BeaumontPO.com to see full methodologies and contracts as they are posted. If you have
any questions, feel free to contact us at info@BeaumontPO.com or (517) 336-1400. Our personal contact information is
available on the website under the “Board of Directors” tab.


Beaumont Physician Organization Leadership
John D. Bonema, MD – Secretary     Jeffrey M. Klein, MD – Director                               Marc Weisman, DO – Medical Director
George Costea, DO – Director       Mark D. Kolins, MD – Director                                 Mark R. Zohoury, DO – Chair
Sundeep S. Dhillon, MD – Director  Vikram V. Mali, MD – Director
James D. Grant, MD – Director      Theodore L. Tangolos, MD – Treasurer

To top