MINNEAPOLIS, Updated 3:20 p.m., CDT July 26, 2006 -- Blue Cross and Blue Shield of Minnesota released details Monday about its new tiered health plan for clinics.

Under the plan, patients will pay higher out-of-pocket costs for being treated by physicians working at clinics in the second tier. (See chart below for clinic rankings)  

Blue Cross is currently selling the health plan, called Blue Precision, to large, self-insured employers. For those that sign up, the benefit will be available January 1.

Blue Cross will have two versions of the product, Achieve, which places fewer clinics in the preferred tier and Perform, which places more clinics in the first tier.

Blue Cross says employers can expect to save 6 to 8 percent by using the product.

This is Blue Cross’s second attempt at designing a tiered health plan product for clinics.

In May 2005, Blue Cross shelved its clinic tiering scheme that placed physicians in one of two tiers based solely on their hospital referrals.

Blue Cross backed away from the proposal after hearing concerns from MMA leaders that the plan unfairly ranked clinics based solely on hospital costs, which are beyond a clinic’s control.

This time around, Blue Cross says it is determining a clinic’s tier based on both the cost and quality of the care the clinic provides. Blue Cross hired Health Benchmarks, Inc., to help it rank clinics. 

On the cost side, Blue Cross says it judged the efficiency of clinics based on what they charged for industry-standard, episode treatment groups (ETGs).  An ETG for a specific illness, such as broken leg, is the group of procedures, visits, tests, and so forth needed to treat that broken leg. Insurers then find the average cost for that bucket of treatments and use that number as a benchmark.

Blue Cross says it also considered whether a clinic tends to treat sicker patients than other clinics when it judged whether the clinic was efficient or not.

To measure a clinic’s quality, Blue Cross says it used more than 30 evidence-based quality metrics applied to physicians in 17 specialties.

MMA CEO Robert Meiches, M.D., said Blue Cross made a concerted effort to gather input from physicians during the development of this product. Blue Cross officials met with MMA members who stressed that a Blue Cross tiering product should use meaningful measures and have an open, transparent method of ranking clinics.  

“Conceptually, we’ve taken a position that tiering is a positive thing to do because it puts more information in the hands of consumers,” Meiches said.

However, he wasn’t ready to comment on the specifics of the Blue Cross product. “We are in the final stages of evaluating the various tiered products in the market and hope to come out with some information in the fall,” he said.

Blue Cross plans to inform all affected clinics of their tier by the end of July. The initiative will only affect clinics in the population centers where competition exists such as the areas around the Twin Cities, St. Cloud, Duluth, Mankato, Fargo-Moorehead, Sioux Falls, and Rochester.

For more information, providers can contact their Blue Cross representative or can e-mail Blue Cross at networks@bluecrossmn.com.

Here’s a list of the clinics and their rankings.