Pay-for-Performance Initiatives

BACKGROUND: Improving the quality of care provided to beneficiaries while reining in costs, is a key goal for Medicare programs. The emerging payfor-performance (P4P) movement is a reimbursement strategy that provides incentives to improve the overall quality care provided to patients, which can lead to improved clinical outcomes and reduced health care utilization and costs. OBJECTIVE: To review current P4P initiatives from Medicare as well as the results of select national P4P programs. SUMMARY: P4P strategies are an attempt to link financial incentives to increase efficiency and quality of care, improve clinical outcomes, and provide disincentives for providing care that does not achieve adequate outcomes. The Centers for Medicare & Medicaid Services (CMS) has developed numerous P4P initiatives to support improvements in the care of Medicare beneficiaries. CMS-sponsored initiatives include hospital demonstration projects that focus on a set of 10 quality measures and link reporting of those measures to payments that hospitals receive. In addition, there are demonstration projects aimed at physician group practices and the use of health information technology (IT). Another aspect of P4P is the movement toward nonpayment for nonperformance, which is intended to provide a negative incentive toward preventable complications resulting from medical errors or improper care. CONCLUSION: P4P programs represent an attempt to harness the potential of health care payment structures to motivate quality-enhancing and cost-saving changes in the behavior of physicians, pharmacists, and other health care professionals, as well as in the health care systems where they practice.