CMS Physician "Pay-For-Performance" Pilot

On February 1, the Centers for Medicare and Medicaid Services (CMS) launched its first physician pay-for-performance pilot program. The agency will provide bonuses to physicians at 10 participating clinics who achieve more efficient and better quality care, the Wall Street Journal reports. The project, which CMS Administrator Mark McClellan called part of an effort to "develop quality measures in virtually all settings of care," focuses on 32 quality measures for chronic and preventive disease management in the Medicare population, such as vaccination rates among patients at high risk for influenza, blood pressure control for diabetics, and use of cholesterol-lowering medication by patients with heart disease. Other targeted areas are coronary artery disease, diabetes mellitus, hypertension, and preventive services, such as breast and colorectal cancer screenings.

Medicare currently reimburses physicians on the number and complexity of patient services. By anticipating patient needs, especially those with chronic diseases, health-care providers who partner with patients can intervene before expensive procedures and hospitalizations are required. The Physician Group Practice demonstration is designed to encourage these preventive efforts.

Under the program, participating physicians continue to receive payments based on services delivered, but also become eligible for annual bonuses of up to 5% of their overall annual Medicare compensation, "if they reduce the anticipated increase in costs for certain patients." Meanwhile, the American Medical Association says that while it is "too early" for CMS to restructure physician reimbursements based on quality, "demonstration projects seem to be the right process" for evaluating the pay-for-performance model" (Lueck, Wall Street Journal, 2/1/05).

For more information, visit www.cms.hhs.gov/researchers/demos/pgp.asp.