New program requirements for BDC and COE designations
Effective with any new Blue Distinction Centers/Centers of Excellence designations and renewal of current BDC/COE designations, hospitals are required to comply with two provider contracting standards related to controlling health care costs.

The first standard pertains to hospital-based physicians, including all PARE physicians (pathologists, anesthesiologists, radiologists and emergency room physicians). Hospitals pursuing BDC/COE designations must have all PARE physicians contracted with BCBSM and BCN at TRUST reimbursement rates.

The second standard pertains to inpatient reimbursement methodology of hospitals. To be eligible for BDC/COE designations, hospitals must be contracted with BCBSM and BCN at the standard reimbursement methodology. That is, DRG reimbursement for peer groups 1-4 hospitals and charge based reimbursement for peer group 5 hospitals.

COE programs are Michigan programs of select facilities which that meet stringent program standards. BCBSM has offered members a cardiac COE program in 1996 and BCN has established a bariatric COE network effective July 1, 2006. Hospitals designated as COEs are also designated as Blue Distinction Centers.

The Blue Distinction Centers for Specialty Care is a national network of designated facilities within service areas of participating Blue Plans that meet stringent objective, evidence-based selection criteria established in collaboration with expert physicians and medical organizations. BDCs are developed collaboratively by Blue Plans in the country, in partnership with the Blue Cross and Blue Shield Association. In addition to cardiac care and bariatric surgery, BCBSA and BCBSM also offer BDCs in transplants and complex and rare cancers. BDCs in other areas of care, such as spine and joint surgery, are under development in 2009.

The BDC for Specialty Care provides consumers with a framework for making informed decisions regarding where to go for specialty care. Currently, with the exception of the Blue Distinction Centers for Transplant that has benefit differentials to steer members enrolled in the program to BDCT centers, the other BDC programs currently do not steer members to certain centers.

However, as more customers consider offering benefit differential to steer members to BDC providers, BCBSM needs to ensure that all professional practitioners (in particular hospital-based physicians affiliated with these BDCs) are participating with BCBSM at competitive rates (TRUST rates) to maximize the value to BCBSM members. As a result, BCBSM is instituting additional contract eligibility requirements for potential BDCs/COEs. All hospital-based physicians (PARE providers) of BDC providers must be contracted with BCBSM at the TRUST rates for our PPO and HMO members. In addition, the hospitals must be reimbursed according to the standard reimbursement methodology.