Commercial Health Insurers Must Direct 40% Of Payments Through "Alternative" Models

Rhode Island’s health insurance commissioner is requiring insurance companies to put more money into so-called alternative models for paying doctors. That means directing more payments toward quality instead of the number of visits to the doctor’s office.

What’s an alternative payment model? Here’s an example: bundled payments. Say you need a hip replacement. Instead of paying for the surgery andthe anesthesia and the post-operative therapy, all of that gets bundled together into one price. Now insurers have to seek out these kind of models – and make them 40 percent of their total claims by 2017.

But will it save Rhode Islanders money in the long run? Health insurance commissioner Dr. Kathleen Hittner says it’s hard to predict, but with a new statewide health care database,“We’ll be able to trace it and know if we’re being successful or not," says Hittner.

Hittner has also issued a new ruling for primary care practices. They must do more to bring down costs.