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Newsletter Article


Pay-for-Performance in Medicaid

States and health plans are increasingly developing provider incentive programs to drive quality at the point of care. By jointly implementing provider incentive strategies, purchasers and plans can replace well-meaning but redundant and often conflicting programs. The resulting standardization of provider incentive programs can dramatically improve physician response to quality improvement efforts and support investments in the systems needed at the practice level to improve care.

From 2006–08, with funding from The Commonwealth Fund and additional support from the Robert Wood Johnson Foundation, the Center for Health Care Strategies (CHCS) engaged seven states in a Pay-for-Performance Purchasing Institute to develop provider incentive programs.

This new CHCS resource paper highlights provider-incentive approaches for states to consider based on the efforts of three Pay-for-Performance Purchasing Institute participants and two additional states. It outlines considerations for states for developing standardized incentive programs and details recent Centers for Medicare and Medicaid Systems policy around this topic. The paper was released last week at the Integrated Healthcare Association Fourth Annual Pay for Performance Summit.

While just one tool in the Medicaid quality improvement "arsenal," provider incentive programs present an important opportunity to synchronize physician-level quality improvement efforts. In particular, these programs can help lay the groundwork to align quality and reimbursement at the physician practices as part of broader payment reform.

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