Michigan, Vermont Blue Cross Blue Shield sign agreement


The Blue Cross Blue Shield outfits in Michigan and Vermont have reached a deal to affiliate and work together within each respective company, the organizations announced today.

The companies said their combined powers would enable them to broaden the range of health plan and service solutions they offer, while still remaining committed to local communities in each state.

The agreement is still awaiting the approval of state regulators.

BCBS Vermont said it would benefit from the additional expertise, as well as operational and information technology resources. The aim is to enhance overall affordability and quality while offering a broader range of services that meet members' needs.

It will preserve BCBS Vermont's local identity while allowing both firms to focus on high-value care, the organization said.

Under the affiliation, Blue Cross and Blue Shield of Vermont will become part of the Blue Cross Blue Shield of Michigan's enterprise family of companies. The agreement, approved by the respective plans' boards of directors, maintains a Vermont organization with governance, operational and policy decisions made locally.

BCBS Vermont will stay under the same name with the executive leadership team and workforce based in Berlin, Vermont. No changes will be made to the current headquarters, board of directors or leadership team of Blue Cross Blue Shield of Michigan.

There will not be any financial exchange between the two companies because it's an affiliation rather than an acquisition. As is the case today, premiums generated from each health plan will stay in the respective states and will be wholly used to pay claims, administer plan operations and maintain member reserves. The group will continue to operate economically as a single state plan.

BCBS Michigan is already working with other Blue Cross and Blue Shield licensed companies to carry out various initiatives encompassing technology, health plan offerings, and innovation.

The move comes after BCBS Michigan and six physician organizations across the state launched full-risk reimbursement arrangements for their Medicare Advantage PPO and Blue Care Network Medicare Advantage plans.

With those deals, along with existing full-risk contracts, about 30 percent of BCBSM's total Medicare Advantage membership now receives services from doctors in full-risk reimbursement arrangements.

BCBS Vermont, along with the Vermont Health Plan, filed a lawsuit against Teva Pharmaceuticals in August alleging that the company has used unsound marketing practices to promote and sell Copaxone, a drug used to treat multiple sclerosis.