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RGHS agrees to pay-for-performance deal with Excellus

Rochester Business Journal
October 10, 2012

Rochester General Health System has reached an agreement for a pay-for-performance deal with Excellus Blue Cross Blue Shield.

Described to the health system’s staff in an internal communication from RGHS president and CEO Mark Clement as a “breakthrough …that will serve as a regional and national model,” the Performance & Quality Incentive Program is to take effect in January and run for the next five years.

In the memo, Clement describes the program as one that would replace the current fee-for-service reimbursement scheme, which pays doctors and hospitals only according to how many office visits or procedures they do, with one that would focus less on the quantity of services delivered and more on outcomes and quality of care. 

“Our system and our physicians will assume greater accountability for managing the care and health of more than 110,000 Excellus members,” Clement said in the memo.

The RGHS-affiliated physician organization, the Greater Rochester Independent Practice Organization is part of the deal, Clement added.  Specifics of the arrangement will work are not covered in the memo. 

James Redmond, vice president of community relations at Excellus confirmed the insurer had inked a deal with RGHS but declined to supply details of the arrangement.

“We have been in discussions with Rochester General Health System and the Greater Rochester Independent Practice Association and we have reached an agreement on a new approach to patient-centered care and working together to improve the delivery of quality health care,” Redmond said in an email. “We are now in the process of finalizing the documents with those two groups.  We'll share more details when that is done.”

Clement similarly promised to provide specifics at a later date.

RGHS, its physicians and Excellus  “are working together to proactively respond to the realities of healthcare reform with a patient-focused, sustainable solution. The details of the program, designed to improve patient outcomes, will be announced soon,” he said in an emailed statement.

RGHS’ pact with the area’s largest private insurer that Clement outlines in the memo is in line with new Medicare payment schemes and initiatives outlined in the Patient Protection and Affordable Care Act.

The Centers for Medicare and Medicaid Services’ bundled-care payment scheme, for example, looks at treatments as so-called episodes of care rather than as a series of isolated occurrences, an arrangement that is hoped to promote greater cooperation, communication and coordination among providers. 

Rather than paying multiple claims to surgeons, anesthesiologists and others involved in an operation and the surgical procedure’s post-operative care, for example, an entire team of doctors involved in the episode would be compensated with a single bundled payment.  

Under the banner of clinical integration, GRIPA, whose members are affiliated with or employed by RGHS’ Rochester General and Newark-Wayne Community hospitals, has long promoted similar cooperation among its providers.  

RGHS is the area’s second largest health system.

The University of Rochester Medical Center, which includes the Strong Health system, Strong Memorial Hospital and Highland Hospital is the region’s largest provider organization. It is developing an organization it is calling an affordable care network that would enlist URMC employed and private practice doctors as members. Towards goals similar to those Clement outlines in the RGHS/Excellus deal, the URMC ANC plans eventually to negotiate pacts with private and government insurers, URMC spokeswoman Teri D’Agostino said.

(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail

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