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Rewarding Provider Performance: Aligning Incentives in Medicare
ing. The costs associated with collecting and reporting data may be significant, especially for small providers such as independent physicians. A common suggestion for easing the burden of data collection and reporting is the use of health information technologies. As discussed later in this chapter, however, many barriers to the adoption of such technologies exist, including a lack of technical expertise, little agreement on software standards, and cost.
Recommendation 6: Because public reporting of performance measures should be an integral component of a pay-for-performanceprogram for Medicare, the Secretary of DHHS should offer incentives to providers for the submission of performance data, and ensure that information pertaining to provider performance is transparent and made public in ways that are both meaningful andunderstandable to consumers.
There are two views on how the burden of reporting should be treated. Some argue that the costs associated with collecting and reporting data should be considered a portion of the investment providers must make to be eligible for rewards. Others believe that providers should not be forced to bear these costs until there is convincing evidence that pay for performance can enhance performance and that enhanced performance will lead to significant rewards.
The committee proposes that, initially at least, providers receive payment for collecting, submitting, and reviewing the performance-related data that will be publicly reported and used in the pay-for-perormance program. Financial incentives for the initial submission of data would help defray providers’ costs for coding and collecting performance data that cannot be obtained from existing administrative or claims records. Such incentives might also reduce provider opposition to the new system.
The committee believes the pool of funds supporting such incentives should be modest, comparable to those resources used to provide incentives for the voluntary reporting of performance measures by acute care hospitals, and that these payments should end when the collection and reporting of performance measures become routine. Because the committee envisions the continuous development of new and more complex metrics, focused on measures of efficiency and shared accountability, reporting incentives could correspondingly be redirected to new areas that are more complex and difficult to measure. This approach would ensure that providers are not paid merely for the submission of routine data, but are offered incentives that encourage and reward public reporting in areas that can serve as potential levers to improve overall quality. The rewards associated with public reporting should be a small fraction of those devoted to rewarding performance.