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Rewarding Provider Performance: Aligning Incentives in Medicare
the Diabetes Physician Recognition Program1 $100 for each diabetic patient in their panel. This program requires physicians to document performance on a number of process and outcome measures through medical record review. Similarly, the Heart/Stroke Physician Recognition Program2 has been launched in selected markets. Finally, through Physician Practice Connections,3 doctors can receive up to $55 per patient for establishing clinical information systems in their offices that aid in regular follow-up for chronically ill patients and for implementing patient education programs.
Pay-for-performance programs are being used in both the health maintenance organization (HMO) and preferred provider organization (PPO) settings. Since 1999, the Hawaii Medical Service Association, the local Blue Cross and Blue Shield affiliated plan and the largest health plan in the state, has rewarded the physicians in its PPO network based on quality measures. In 2003, individual bonuses ranged from $500 to $20,000 (Landro, 2004). These bonuses represent about 5.5 percent of the physician’s overall salary (Rosenthal et al., 2004). Anthem Blue Cross and Blue Shield of New Hampshire’s plan pays bonuses based on a variety of measures that assess appropriate primary and secondary prevention, including screening for breast, cervical, and prostate cancer; screening of patients with coronary artery disease for high cholesterol; and provision of retinal exams for diabetic patients. Anthem’s performance bonus was $20 per patient per year for the top quartile of physicians (about 5 percent of compensation) and about half of that amount for physicians ranked between the 50th and 75th percentiles. Physicians were also eligible for an additional payment of $20 per patient for participating in the plan’s disease management program (Rosenthal et al., 2004).
Some medical groups and independent practice associations incorporate incentive programs into their payment methods. For example, the Hill Physicians Medical Group, one of the nation’s largest independent practice associations, puts up to 15 percent of physician compensation at risk based on quality performance (PBGH, 2005). The program looks at clinical measures (including IHA measures plus other HEDIS measures), information technology functionality, and patient experience. In 2005, Hill Physicians received $5.9 million in funds under the IHA program, but actually distributed $26 million in performance rewards (Hill Physicians, 2005).
The Diabetes Physician Recognition Program was developed by the American Diabetes Association and the National Committee for Quality Assurance (NCQA).
The Heart/Stroke Physician Recognition Program was developed by the American Heart Association/American Stroke Association and NCQA.
The Physician Practice Connections was developed by Bridges to Excellence and NCQA.