Financial Incentives

Pay for Performance (P4P) Provider Incentive Program

Captured 2023-04-04
Document Highlights

Currently more than 25 states have P4P programs with their health plans or primary care case management (PCCM) programs.

[T]here is growing involvement of state Medicaid agencies in provider incentive programs.

In 2006, with funding from The Commonwealth Fund and additional support from the Robert Wood Johnson Foundation, the Center for Health Care Strategies (CHCS) launched the Pay-for-Performance Purchasing Institute to help state Medicaid agencies design provider incentive programs.

Seven states — Arizona, Connecticut, Idaho, Ohio, Massachusetts, Missouri, and West Virginia — worked with CHCS to develop and test physician-level financial and non-financial incentives, choose performance measures, engage providers effectively, and increase alignment across incentive programs.

[E]arly P4P programs tended to focus on measures specific to services that mothers and children typically received, such as prenatal care visits, well-child checkups, and immunizations.

As of July 2006, 28 state Medicaid agencies operated P4P programs, and half of those programs were operating for five or more years.

Again, the majority of these programs were at the health plan level, followed by those targeting primary care case management (PCCM) programs, nursing homes, hospitals, behavioral health care providers, and lastly, individual physicians.

Comments

What is a Pay For Performance Provider Incentive Program?

Health insurance companies use monetary payments to doctors as a way to incentivize patient well-visits, testing, immunizations, and more. The claim is that these programs are implemented to improve the quality and standard of care for patients.

For example, a pediatrician will typically receive a financial payout amount per child patient in their practice who is up to date on vaccinations by the age of 2, and will also be encouraged to increase the percentage of compliance (the number of children up to date by age 2, relative to the number of children who are two years old by the end of the payout date).