“Pay for Performance” approach allows payers to reward physician groups or hospitals for quality care based on specified performance criteria. Since this area is new, healthcare consortiums and foundations are testing the waters by developing pay for performance programs to test their viability. Listed below are pilot programs that are exploring this initiative.
CMS Hospital Quality Initiative
CMS has taken the first step toward aligning Medicare payment with better quality by launching the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) , an effort to get hospitals to voluntarily report quality data for 10 measures. Section 501(b) of the Medicare Prescription Drug, Improvement, and Modernization Act developed the RHQDAPU program and the Deficit Reduction Act of 2005 (DRA) established new requirements, which build on the Hospital Quality Intiative. Hospitals that do not participate in the RHQDAPU will receive a reduction of 2.0 pecent in their Medicare Annual Payment update for fiscal year 2008. Find information regarding the initiative on the CMS Hospital Quality Initiative web page and for current information on the program go to QualityNet New .
Premier Hospital Quality Incentive Demonstration
This project is part of Centers for Medicare and Medicaid Services (CMS) Hospital Quality Initiative. Premier is a nationwide organization of not-for-profit hospitals, rewarding top performing hospitals by increasing their Medicare reimbursement based on quality measurements. Under this three year project, hospitals that demonstrate high quality performance for inpatients with heart attack, heart failure, pneumonia, coronary artery bypass graft, and hip and knee replacement will receive a financial bonus. The first year results were available November 14, 2005. The Health Quality Incentive Demonstration(HQID) home page provides detailed information on the Premier Hospital Quality Incentive Demonstration project, such as a fact sheet, an explanation of the 34 clinical areas and quality measures, terms and conditions of participating, a list of participates, and an explanation of the composite quality score methodology. The HQID second year results showed patients living longer and receiving recommended treatement more frequently.
Bridges to Excellence Organization
Bridges to Excellence is a not-for-profit organization made up of physicians, employers, health plans, and patients dedicated to improving quality in healthcare. Their purpose is to create financial incentive programs that reward providers for improved quality in the healthcare system. The three programs currently underway are the Physician Office Link, the Diabetes Care Link, the Cardiac Care Link, and Spine Care Link.
Leapfrog Group
The Leapfrog Group is a coalition of public and private organizations created to reduce medical errors and improve quality and safety in hospitals. The Leapfrog Hospital Rewards Program (LHRP) ties financial incentives to hospital performance on measures collected and reported by JCAHO. LHRP is the first nationally standardized pay-for-performance program that can be licensed and implemented by employers, healthcare coalitions, and health plans.
Integrated Healthcare Association (IHA)
IHA is a statewide health leadership group in California, consisting of physician groups, healthcare systems, and academic, consumer, purchaser, and pharmaceutical representatives. IHA’s pay for performance program rewards physician groups for quality care based on criteria measurements developed by IHA. The six participating health plans are: Aetna, Blue Cross of California, Blue Shield of California, CIGNA Healthcare of California, Health Net and PacifiCare. Each plan will use the common performance measurements while designing its own physician group bonus program. The history of the project and details on the criteria measurements for physicians and described this on this page. The latest update on the status of this program are found on the IHA homepage under the "pay-for-performance" tab.
Robert Wood Johnson Foundation & California Healthcare Foundation
Rewarding Results is an $8.8 million initiative of the Robert Wood Johnson (RWJ) Foundation and the California Healthcare Foundation to improve healthcare quality. The objective is to align financial incentives with high quality health care. The overall evaluation of Rewarding Results was sponsored by the Agency for Healthcare Research and Quality and RWJ. The Leapfrop Group provides on-going technical support.
Reports
Report to Congress: Plan to Implement a Medicare Hospital Value-Based Purchasing Program by U.S. Department of Health and Human Services, November 21, 2007. This report builds on Medicare's current Reporting Hospital Quality Data for Annual Payment Update program.(RHQDAPU). The value-base purchasing program includes both public reporting and financial incentives as drivers to improve clinical quality and efficiency.
Climbing Up the Pay-for-Performance Learning Curve: Where are the Early Adopters? by Health Affairs, November/December 2007. This document examines the evolution of twenty-seven early adopter of pay-for-performance programs and the lessons they learned.
Pay for Quality: A Strategic Perspective by Deloitte & Touch, August 2007. This report looks at the gap that exists between good and excellent care by examining healthcare services in Topeka, KS. A viewpoint on how to achieve safe and effective care is provided.
Are You Ready for Quality-Based Payment ? by HFMA Resource Library, July 2007. This report discusses how the quality-based performance payment trend has impacted the documenation and coding process.
A Hospital's Tale: Understanding Challenges and Strategies Associated with Data Reporting is Key to Effectively Communicate Performance, by HFMA Resource Library, February 2007. Hospitals are collecting and analyzing large amounts of data for marketplace comparison and to determine the level of payment. Healthcare finance executives use data to communicate how hospitals are performing in patient outcomes, resource utilization, and quality measures.
Keeping Score - A Comparison of Pay-for-Performance Programs among Commercial Insurers, by PriceWaterhouseCoopers, 2007. This report compares the ten largest commercial payers' pay-for-performance programs and reviews their score cards.
HFM Toolbox: Pay-for-Performance Checklists, by HFMA Resource Library, December 2006. These checklists give providers a framework to assess the participation as well as preparation for pay-for-performance programs.
Paying for Performance - A Call for Quality Health Care by Deloitte & Touch, October 2006. This report covers the background of the pay-for-performance movement, the current status of the pay-for-performance pilot programs, and explains the operational, marketing, and legal considerations of implementing a pay-for-performance program for healthcare entities.
Value-based Purchasing Employer Survey by Deloitte & Touche, October 2006. This report is based on a survey of large U.S. employers evaluating why pay-for-performance programs are gaining in popularity, which organizations are implementing them, and what are the obstacles in widespread adoption of pay-for-performance.
The Quality Conundrum: A Global Persceptive on Healthcare Quality, by PriceWaterhouseCoopers,October 2006. This survey examines the quality initiatives of ten countries and more than fifty industry leaders and the common set of issues that emerged.
Strategies to Improve care: Pay for Performance and Information Technology, March 2005 by the Medicare Payment Advisory Commission (MedPAC) This chapter discusses the importance of adding Medicare pay for performance programs to home health agencies and physician services as well as accelerating the use of information technology to improve healthcare quality.
Quality of Care for Medicare Beneficiaries by Medicare Payment Advisory Commission, (MedPAC), March 2004. This report provides specific recommendations on how to link financial incentives to quality provider services.
Quality-Related Provider and Member Incentive in Medicaid Management Organizations by the Center for Health Care Strategies, Inc.July 2004. This study examines seven lessons for Medicaid managed care organizations and states considering incentive programs.
Updated February 4, 2008