Blue Cross Blue Shield Update: Important Information for BCBS Members

Article Date: Jun 5, 2014

Blue Cross Blue Shield of Nebraska (BCBS) recently issued a notice of termination to its members for the contract covering how we work together in providing care to BCBS members across Nebraska. Our current contract is set to end on September 1, 2014.

For the time being, nothing changes for you – our providers and hospitals will continue to care for you as we always have. We are continuing good-faith negotiations with BCBS and are hopeful that we can reach a resolution that best serves both organizations, our healthcare providers and most importantly - you.

At the heart of these negotiations is a fundamentally different approach to care and reimbursement. We are committed to a new, progressive payment model focused on quality and outcomes, which lead to lower cost;  BCBS prefers to hold on to an outdated fee-for-service model that fragments care and pays for each service provided. Clearly that does not work. Other payors, including the federal government through the Medicare, recognize the need for innovative payment models like bundling payments and creating accountable care organizations, which focus on total cost for care rather than unit cost for care.

We appreciate our communities' patience as we work through this negotiation. Our CEO, Cliff Robertson, MD, outlines our position and why it's important in this video. You can read more about Cliff and find some answers to your questions in the documents under the "Related Links" area on the right side of this page.

Call Blue Cross Blue Shield of Nebraska's dedicated hotline at 844-286-0855 if you have questions or concerns, or would like to encourage them to to shift toward a value-based payment model.

Reader Comments
Posted: Jun 5 2014 2:00 AM CST by

I am writing to you today to express my concerns referencing the ongoing negotiations between Blue Cross Blue Shield and Alegent Healthcare. I have been insured by Blue Cross Blue Shield for many years. I have been very satisfied with medical services provided by Dr. Robert Recker and the entire Alegent Healthcare System and I would prefer to remain under their care.

I have written to Blue Cross Blue Shield and Dr. Robert Recker expressing the same concerns and I sincerely hope you can come to a resolution in the very near future.


Posted: Jun 5 2014 6:34 PM CST by

Thank you for your comments, Delores. We understand your concerns, and, like you, we hope to come to a resolution with BCBS very soon. We are very committed to working with BCBS on these negotiations and believe that a value-based payment model is the right thing for our patients.

Posted: Jun 5 2014 9:24 PM CST by

My entire family has been using Alegent services and doctors for 40 years. My son and I both have BCBS and have been very happy with both relationships. Acting like Congress will benefit no one. Get it together. Life requires creative compromise.

Posted: Jun 7 2014 11:04 PM CST by


We agree. It makes no sense to us to expect that continuing the old way of delivering and paying for health care will result in any different results. We are looking for a creative (and innovative) relationship going forward. Other payers are stepping up. They agree that the old way of doing things won’t get us to where we need to go. Thanks for your comment.

Posted: Jun 11 2014 7:49 PM CST by

I am not understanding how billing would work. If your bill is tied to outcomes does that mean if you do not have a good health care outcome...i.e. your symptoms persist or even worse...die, your bill would be less? How sets the fee for the 'value?'

Posted: Jun 11 2014 2:00 AM CST by


This is a very important question, so thank you for submitting it.

In the current fee-for-service payment model physicians, for example, are paid for each test, each visit, each procedure they order. Likewise, hospitals are paid for each visit as well. So, for example, a mom who has a sick child with a fever in the middle of the night calls the doctor who sends them to the emergency room. The child and parent go to the ER where they sit and wait. When they are seen, the medical team may not know the child's medical history. The medical team does the right things - starting IV fluids and drawing blood to determine a diagnosis and treatment plan. Hours and (hypothetically) $1,200 later they learn that the child has an ear infection. In a fee-for-service model, BCBS pays for the Emergency Room visit. What we're suggesting is reimburse the physician (who knows the child well) to go to the patient's home or conduct an "e-visit" where in a few minutes and for (hypothetically) $100 dollars, the child receives the same diagnosis via a computer, ipad or cell phone without leaving home. The difference between those two encounters is significant in terms of dollars and patient experience, both of which speak to the "value" we are trying to create for our patients.

So, what happens to the cost part of this encounter in a “value-based” model? The (hypothetically) savings between an Emergency Department visit and an e-visit is, in this case, hypothetically $1,100. That savings is shared between the provider and the payor, which incentivizes all of us to find better, more convenient ways to care for patients. It's a win all the way around!

So, under a value-based payment contract, physicians, clinics and hospitals are measured and then paid according to the quality of care they provide which leads to better patient outcomes. This is the model that UniNet has proposed to BCBS. We believe it is better for the patients and is the only way to truly lower healthcare costs in our country.

Posted: Jun 26 2014 9:24 PM CST by

I was intrigued and impressed with Cliff's answer to Teresa Eberhart's good question. Now, using the same example, how would the Value-Based Reimbursement system impact Teresa's out-of-pocket costs? If Teresa was subject to a co-insurance percentage, say 20%, I presume her out-of-pocket cost under the current BCBS reimbursement system would be $240. And, under Value-Based Reimbursement it would be $20. In general, will patients also benefit from the cost savings generated by Value-Based Reimbursement?
Thank you.

Posted: Jun 30 2014 4:06 PM CST by


Thank you for your question. Yes, you are correct in that patients also will benefit from value-based care. In today’s system, patients may access care in ways that are not the most efficient (or most appropriate) for their needs; in this example, going to the ED for fever. In a value-based system, providers, hospitals and insurers work together so the e-visit or late night clinic is available to provide care for these urgent (but not emergent) situations, and the patient benefits as her co-insurance is $20 rather than $240. Down the road, this reduces the overall cost of healthcare so insurance premiums go down, which also helps patients save money.

Posted: Jun 30 2014 4:11 PM CST by

Could you please explain what "value based" pricing means?

Posted: Jun 30 2014 2:00 AM CST by

At its core, a value-based payment system is structured around achieving certain care quality goals for a given population of patients at a pre-determined cost. Within a value-based payment contract, physicians and hospitals are measured, and paid, for providing better quality care with better patient outcomes. Value-based care places more focus on preventive care, to keep people healthy and prevent expensive ER visits and hospitalizations. This is the model that we have proposed to Blue Cross because of the benefits it will provide for all involved, and we are confident that we will be able to come to mutual resolution. We know that value-based care models are better for patients and employers as they aim to simplify the current healthcare system. And while every day we work to make it better, we still have a long way to go. Real transformation will require partnership, and that’s why we’re approaching our negotiations with Blue Cross with compromise and collaboration in mind.

Posted: Jun 30 2014 4:14 PM CST by

This is definitely an interesting concept of payment, and certainly worth taking a look at. I'm curious to know, however, will Medicare follow your lead of payment?

Posted: Jun 30 2014 4:15 PM CST by

Medicare already is. The Medicare Shared Saving Program (MSSP) allows LeeAnn,

Medicare to work with accountable care organizations to try and reduce total cost of care and improve quality. If quality is improved and cost is reduced, Medicare will share some of the savings with the accountable care organizations. Alegent Creighton and UniNet have formed an accountable care organization and is participating in the MSSP.

Posted: Jul 1 2014 11:12 PM CST by

Good video - but there is a fallacy being advertised here.

The phrase "better health care" was used several times. Exactly what is the reference point for this version of "better health care"?

By the way, I absolutely enjoy Alegent services and am slightly stressed out that my health care is in the hands of business people. This rarely benefits the consumer.

Posted: Jul 2 2014 12:58 PM CST by

In correspondence we get from BCBS, they claim your average cost for treatments are significantly higher than other providers. Would you respond to that? Is your "value-based" system in use already or is it proposed for the future? If it's already being used and ends up being higher than other institutions, then I don't understand. Thanks.

Posted: Jul 17 2014 12:00 PM CST by

Since the contact issue is with Blue Cross of Nebraska, will the doctors that work for, and any hospitals that Alegent owns in the State of Iowa, be affected by this in any way? I would not think so as the doctors and hospitals' billings, etc., should be under contract with Wellmark Blue Cross Blue Shield of IOWA. Can you confirm or correct? Thank you!

Posted: Jul 24 2014 6:23 PM CST by


I am so pleased to hear you enjoy Alegent Creighton Health services. Your experience is very important to us. You asked about the reference point for “better health care.” All providers report quality measures to the Centers for Medicare and Medicaid. Those measures “grade” us on things like, “did you have to go back into the hospital after you were discharged?” “What was your outcome and was it better than the industry standard?” “What are we doing to keep you out of the hospital and provide follow-up care in your home?” All of those things fall within the scope of “better health care.” You can go to to see how providers compare.

The better our scores, the better our reimbursement from Medicare. That’s the future of health care – keeping you out of the hospital and in better health. Unfortunately, the financial incentives (reimbursements) are still tied to the fee-for-service model where payment occurs after each test, visit, or xray. So, value-based care places more focus on preventive care, to keep people healthy and prevent expensive ER visits and hospitalizations. This is the model that we have proposed to Blue Cross because of the benefits it will provide for all involved, and it's the model we're using with other payers.

Posted: Jul 24 2014 6:29 PM CST by


Based on our review of the services we provide, and similar offerings from our competitors, we believe that our prices are not only fair but absolutely in line with our quality. As a system we are committed to controlling costs and believe this is best achieved by coordinating care through value-based agreements with payers. We are moving to value-based contracts with other insurers, who are excited to move to this new model that benefits everyone. A value-based model better controls costs, improves patient satisfaction and improves the quality of the care patients receive. To your question about whether we already have value-based models in place, the answer is yes. In other partnerships, we have designed what we call a “medical neighborhood” of physicians, nurses, dieticians, social workers, and pharmacists who work together to manage the care of Medicaid patients, ultimately reducing redundancies in care and improving the overall patient experience. Through this program, we saved nearly $20 million over three years. We’ve also implemented value-based care for our own employees, and we’re seeing similar benefits for improved patient outcomes and overall health, and lower costs. These are just reasons we know that value-based care models really do work. The fact that other health plans are willing to pursue these programs is also strong proof.

Posted: Jul 24 2014 6:34 PM CST by


You are right - the exception in our negotiation is Blue Cross Blue Shield of Iowa, which is not affected as Mercy Hospital in Council Bluffs and some physicians have direct contracts with Wellmark. However, Iowa patients covered by Wellmark who seek treatment in Nebraska will be out-of-network.

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Related Links
Negotiations Home Page

Video Transcript PDF

Contract Negotiation FAQs PDF

Cliff A. Robertson, M.D., MBA