Hospital Pay For Value

Blue Cross Blue Shield of Michigan recognizes hospitals for achievements and improvements in quality, efficiency and population health management through their active participation in Pay-for-Performance programs and Value-based Contracting efforts.

These programs improve both patient and population-based quality, increase hospital-physician alignment and lower costs. This transformation to a pay-for-value approach has progressed quickly over the last few years.

BCBSM’s Hospital Pay for Performance programs, recognize both mid-to-large sized (PG1-4) and small rural (PG 5) short-term acute care hospitals for their achievements in improving health care quality and cost efficiency. The program structure and measurements for the Pay-for-Performance programs are developed with input from P4P hospital workgroups.

The charts below show how the various program components are weighted for 2017:

2017 Program Components and Weights

Prequalifying Condition   0%
Collaborative Quality Initiatives   40%
Hospital Cost-Efficiency   10%
Health Information Exchange   10%
All-Cause Readmission Domain

  • Readmission Rate Performance
  • Alternative Readmission Measures
 Sliding scale:

  •  At least 20%
  • Maximum 10%
Michigan Value Collaborative   10%


2016 – 2017 PG 5 P4P Program Components and Weights



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Two Opportunities to Earn Rewards under Value-Based Contracting

Infrastructure Funding
Population-based Performance


Under the new value-based contract approach, hospitals are encouraged to work with physicians to provide cost-efficient care for a shared patient population. The reimbursement approach supports hospital efforts to develop the infrastructure needed to track and coordinate population-based care. Reimbursement also rewards population-based performance. This approach shifts health care from a fragmented, fee-for-service system toward a value-based system that rewards collaboration.

Hospitals receive claims data on all BCBSM commercial members who are attributed to the hospital’s partner physician organizations. This data helps providers improve clinical integration and coordination to improve outcomes.

For information about participating in Hospital Pay for Value, please contact or Value