Payment Methods Used by Your Health Plan

This section presents the payment methods and adjustment used by each health plan offered to University of Minnesota employees. The table below illustrates how every health plan available to University of Minnesota employees pays the majority of their physicians. A second table presents similar information for the University of Minnesota Physicians. Below these tables is a discussion of each health plan and how its payment methods and adjustments are likely to affect your access to specialists and health care in general.

How Each Health Plan Pays Each Type of Physician

	State Health Plan (Point of Service)	State Health Plan Select	Health Partners Classic	Health Partners Plan	Medica Primary	First Plan Select
Primary Care	Discounted FFS	Discounted FFS	Salary	Capitation	Capitation	Discounted FFS
Specialty Care	Discounted FFS	Discounted FFS	Salary	Discounted FFS	Discounted FFS	Discounted FFS
Radiology	Discounted FFS	Discounted FFS	Discounted FFS	Discounted FFS	Discounted FFS	Discounted FFS
Orthopedics	Discounted FFS	Discounted FFS	Discounted FFS	Discounted FFS	Discounted FFS	Discounted FFS
Transplants	Case Rate	Case Rate	Case Rate	Case Rate	Case Rate	Case Rate
Carveouts
Mental Health	Capitation	Capitation	Salary	Capitation	Capitation	Capitation
Withholds	Yes	Yes	No	No	Yes	Yes
Bonuses	Yes	Yes	Yes	Yes	Yes	Yes
Utilization Target	Yes	Yes	Yes	No	No	Yes

Note: These payment methods represent the most common method used by each health plan in 1998. Each health plan was contacted directly to obtain the information for this table.

The University of Minnesota Physicians receive payments from the State Health Plan, State Health Plan Select, and HealthPartners that are similar to those of other physicians.

How Each Health Plan Pays University of Minnesota Physicians

	State Health Plan	State Health Plan Select	Health Partners Classic
Primary Care	Discounted FFS	Discounted FFS	Capitation
Specialty Care	Discounted FFS	Discounted FFS	Capitation
Radiology	Discounted FFS	Discounted FFS	Capitation
Orthopedics	Discounted FFS	Discounted FFS	Capitation
Transplants	Case Rate	Case Rate	Case Rate
Carveouts
Mental Health	Capitation	Capitation	Capitation
Withholds	Yes	Yes	No
Bonuses	No	No	Yes
Utilization Target	Yes	Yes	Yes

Note: Each health plan and representatives of the University of Minnesota Physicians were contacted directly to obtain the information for this table.

State Health Plan, State Health Plan Select, and First Plan Select

The State Health Plan and the State Health Plan Select pay physicians primarily on a discounted FFS basis, although mental health services are reimbursed on a capitated basis. Enrollees in these plans should have few problems getting any necessary tests and procedures done, although mental health services may be provided on a more limited basis because these physicians have to manage a budget imposed by capitation. These two health plans use withholds, bonuses, and utilization targets as incentives for primary care physicians to alter referral patterns to specialists and inpatient hospital services.

The State Health Plan is a point-of-service plan that allows employees access to a wider network of physicians, so most access issues can be handled directly by seeing another physician. Enrollees in the two State Health Plans also benefit from having direct access to University of Minnesota Physicians, because they are in the network. The payment methods for these physicians is nearly identical to all other physicians in the network, so enrollees should experience few limits on their treatment by University of Minnesota Physicians and other physicians.

First Plan Select, based in Duluth, uses the same payment methods as the State Health Plan and State Health Plan Select because Blue Cross/Blue Shield of Minnesota administers all three health plans. Primary care and specialty care physicians are reimbursed on a discounted FFS basis, and mental health care is reimbursed on a capitated basis. Withholds, bonuses, and utilization targets are also used by First Plan Select to control referrals to specialists and hospitals in order to contain total health care costs. Enrollees in First Plan Select who would like to see University of Minnesota Physicians will have to work actively with their primary care physician to obtain a referral to a University physician.

HealthPartners Plan and HealthPartners Classic

The two HealthPartners plans use two payment methods for their primary care physicians - salary and capitation. HealthPartners staff physicians who are employees of HealthPartners are paid a salary that links performance goals to future salary increases. Other primary care physicians are paid on a capitated basis and are responsible for providing all appropriate care for their enrollees. Specialists are paid on a capitated or discounted FFS basis and may include performance incentives for specialists to manage their treatment patterns. In the HealthPartners Classic plan, mental health care physicians are paid a salary. Bonus payments are based on measures of patient satisfaction, quality of care, and delivery of preventive services. Enrollees in the HealthPartners Classic plan also benefit from having direct access to University of Minnesota Physicians.

Medica Primary

The Medica Primary plan pays its primary care physicians on a capitation basis and its specialist physicians on a discounted FFS basis. These two different payment methods, along with the use of withholds, provide incentives for primary care physicians to give as much care as possible themselves and to control the number of specialist referrals. Mental health care is capitated in the Medica Primary plan as it is in all other health plans, which provides an incentive to contain both the cost of each mental health visit and the number of visits by each patient. The University of Minnesota Physicians are not in the Medica Primary network, so enrollees who want to obtain care at the University must work with their primary care physician to receive a referral to a University physician.