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Rewarding Provider Performance: Aligning Incentives in Medicare
STEPS INVOLVED IN IMPLEMENTING PAY FORPERFORMANCE AND THEIR TIMING
Because a pay-for-perormance program depends on many inputs and the creation of new capabilities, the time needed to implement such a system is an issue that requires careful consideration. Before performance-based rewards can be offered, measures must be developed and tested (as discussed in Chapter 4 and the Institute of Medicine [IOM] report Performance Measurement: Accelerating Improvement [IOM, 2006]). Next, data reflecting these measures must be collected and audited, and then distributed to providers for review and feedback. The performance data must then be publicly reported before the final step of paying providers for their performance can be implemented.
Data Collection and Auditing and Provider Feedback
Following the development and testing of performance measures (which as noted was discussed in detail in the Performance Measurement report), the next step toward pay for performance is data collection. Data reflecting how well each provider performs on a given metric can generally be gathered from administrative claims, surveys, or medical chart review (in order of the lowest to highest time and cost burden imposed on providers). As discussed in Chapter 4, trade-offs must be made because data relating to the most useful measures are often the most difficult to collect. After being collected, the data need to be audited by an independent body to ensure their validity before they are used to determine relative performance and payment. Data collection and audit may take 6 months even under an aggressive timetable. Once the data have been audited, the results should be shared with providers, each of whom should have the opportunity to provide feedback. Even on a tight timeline, feedback may initially take up to another 6 months to complete. On a less aggressive timetable, these essential steps could initially take up to 2 years. After the first cycle of reporting had been completed, however, the time required for feedback could be reduced to less than 1 month (see Figure 5-1). The entire timeline should be condensed wherever feasible without imposing an undue burden on providers; differences in ability by various provider types should be recognized.
The committee strongly endorses transparency and accountability in health care to better inform all stakeholders, especially patients, about the performance of the care delivery system. To this end, the committee believes that information reflecting how well health care providers perform on spe-